CK Asset prices Wong Chuk Hang project below cost

Low pricing signals developer may aim for sell-out to spur interest in remaining units

CK Asset Holdings has priced its closely watched project in Wong Chuk Hang well below cost and significantly lower than neighbouring developments in a sign it may be trying to ensure the first batch of flats sells out to drum up interest in the remaining units.

The average price per square foot after discounts of the first 138 flats to go on sale at Blue Coast works out at HK$21,968, the lowest among all completed projects in the Southside residential neighbourhood, according to data compiled by property agencies.

That makes it 26 per cent cheaper than the first batch of Southland – the first phase of Southside – which was launched in April 2021 at HK$29,689 per square foot.

It is also more than 20 per cent below cost, meaning the developer will make a significant loss on the inaugural batch.

“CK Asset’s pricing is very likely to add pressure on other projects atop Wong Chuk Hang station,” said Will Chu, a senior research analyst for Hong Kong and China property at CGS International Securities.

“We can’t rule out the need for CK Asset to achieve a high sellthrough rate for the first batch. Otherwise it may be difficult for it to sell the remaining units.”

The developer has not yet announced the sales date for the first batch, but agents said it could launch next weekend.

The pricing of the project, set to be one of the biggest launches this year, is being keenly watched for signs of the speed and direction of the recovery in the city’s housing market.

Analysts had predicted CK Asset would price Blue Coast’s first batch close to or slightly below cost to attract buyers in an uncertain market. However, the scale of the discount is likely to have surprised them.

Justin Chiu Kwok-hung, executive director of CK Asset, said pricing property should not only take into consideration development costs, but also the market situation. He revealed last month the cost of the project was HK$28,000 per square foot.

Southside in the Southern district of Hong Kong Island has six phases, comprising 14 residential towers with 5,200 units. Phases five and six have not yet launched.

Blue Coast is part of phase three of Southside and is being developed in collaboration with rail operator and developer MTR Corporation. It is set to be one of the biggest residential launches of 2024, with two phases totalling 1,200 units.

CK Asset’s pricing is very likely to add pressure on projects atop Wong Chuk Hang station

WILL CHU, ANALYST

Last year, CK Asset surprised the market by launching its cheapest new homes in seven years. In doing so, it managed to sell all 655 units at its Coast Line II project in Yau Tong, earning it second place in the 20 bestselling major new developments of 2023, according to Dataelements, a data provider that tracks new residential properties in Hong Kong.

The first batch at Blue Coast comprises 22 two-bedroom and 116 three-bedroom flats, with areas ranging from 452 to 972 sq ft.

After the maximum 15 per cent discount, the units were priced at HK$8.78 million to HK$23.1 million, or HK$18,998 to HK$24,072 per square foot, the developer said yesterday. That values the entire batch at HK$2.77 billion.