Developer of some of Hong Kong's smallest abodes may have sold at a loss just to clear the flats off its books to avoid vacancy tax

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/property/hong-kong-china/article/3019049/developer-some-hong-kongs-smallest-abodes-may-have-sold?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | July 23, 2019 2:45 PM SGT
Mainland property developers that arrived late to Hong Kong are discovering not everything always ends well when it comes to risk taking in the world's least affordable market for home ownership.
Chinese developer Jiayuan International Group appears on track for a slim profit or even a loss in its first residential property investment in the city. The developer gave discounts of up to 37.6 per cent at T-Plus, a residential development in Tuen Mun featuring "micro homes".
The new price list, unveiled to potential homebuyers on Sunday, ignited a frenzy of deal making, with 337 units snapped up, according to the developer. The sale netted an estimated HK$1.1 billion (US$140.8 million) in receipts. Jiayuan, which owns a 70 per cent stake in the project, is likely to receive around HK$770 million from the weekend sale, according to analysts.
However, it is not clear whether Jiayuan made a profit on the project.
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"It is possible [some flats of] the project do not make money," said Sam Chi-yung, a strategist at brokerage Springwaters Financial Securities.
The flats were offered at a range of HK$13,494 to HK$20,196 per square foot after discounts.
The starting price is below the average HK$13,670 per square foot Jiayuan paid for its stake in the project, assuming it owns 70 per cent of the total residential gross floor area.
Jiayuan bought 70.1 per cent of the project for HK$938 million in May last year from veteran property investor Tang Shing-bor.
The terms of transaction, involving a residential project with 356 flats and a shopping centre of about 38,000 sq ft, were not made public. About 19 flats in the project remain unsold.
Pictures of the 164 sq ft furnished flat from a T-Plus brochure. Photo: Handout alt=Pictures of the 164 sq ft furnished flat from a T-Plus brochure. Photo: Handout