'Optimistic' CK Asset's new development in Lohas Park is district's most expensive initial launch ever

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/business/article/3089639/optimistic-ck-assets-new-development-lohas-park-districts-most-expensive?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp&utm_content=3089639 | June 23, 2020 2:41 PM SGT
A new development launched in Lohas Park by Hong Kong Tycoon Li Ka-shing's CK Asset is the district's most expensive initial launch ever.
The average price at Sea To Sky, the biggest new project in Hong Kong's largest residential enclave in about two years, will be HK$15,823 (US$2,041) per square foot after discounts for a first batch of 285 flats. The prices start at HK$6.4 million for two-bedroom flats measuring 471 sq ft, or HK$13,648 per square foot. The batch is worth about HK$3.4 billion. The project is expected to be delivered in February 2022.
"This shows that [CK Asset] is very optimistic about the housing market " it thinks many people are still able and willing to buy [such flats]," said Alvin Cheung, associate director at Prudential Brokerage. "The prices have turned out to be firm, despite [Hong Kong's] high unemployment rate."
He said the prices at Sea To Sky marked a U-turn in CK Asset's pricing strategy, as it usually launches projects at lower prices to achieve a fast sales turnover. A good response to recent project launches such as Sun Hung Kai Properties' Wetland Seasons Park following the announcement of a national security law for Hong Kong probably boosted CK Asset's confidence, Cheung said.
Sea To Sky's average price is about 21 per cent higher than the average market price for old homes in Lohas Park, which stands at HK$13,049 according to data from Centaline Property Agency. And if sales are good, other developers will also be encouraged to price new projects at higher levels, Cheung said.
"There will not be such flats with sea view, at such reasonable prices, in Hong Kong in the future," said Justin Chiu, CK Asset's executive director, adding that Sea to Sky should not be directly compared with other projects in Lohas Park. "This price is acceptable. We want to invigorate market sentiment."
He said the project was launched following the relaxation of social distancing rules after the company took the "overall environment" into consideration. He said CK Asset had a social responsibility as a major developer in Hong Kong.
Chiu said he was not worried about emigration away from the city or another outbreak, and that Hong Kong's unemployment rate was much worse during the 2003 Severe acute respiratory syndrome epidemic. He said unemployment was in fact likely to rise to more than 6 per cent, higher than the 5.9 per cent recorded between March and May. But he was confident the catering, tourism and retail sectors would recover after the relaxation of social distancing.
CK Asset is offering discounts of up to 22 per cent at Sea to Sky, as well as flexible payment schemes. It is also offering buyers of three to four-bedroom flats primary mortgages with loan-to-value ratios of up to 85 per cent and secondary mortgages of up to 30 per cent. The company said earlier it had earmarked HK$1 billion for mortgage funding.
The 1,422-unit Sea To Sky project will be the biggest development in Lohas Park since Nan Fung Group's 2,392-unit LP6, which went on sale in September 2018. It is also CK Asset's biggest project since the 1,436-unit Ocean Supreme development in Tsuen Wan West, which went on sale in July 2017.
"The appreciation [in home prices at CK Asset's previous Lohas Park project Hemera] was much higher than the overall property prices," said Crystal Tam, senior principal sales director in Tseung Kwan O at Centaline. When Hemera was launched in March 2015, the Centa-City Leading Index was at 139.70 points. As of early June, the index stood at 178.64 points.
The prices of homes will drop 5 per cent to 10 per cent this year, said Thomas Lam, executive director and head of valuation and advisory at Knight Frank. The ongoing protests, the US-China trade war, the coronavirus outbreak, the national security law, as well as Legislative Council elections in Hong Kong and the upcoming US presidential polls could all affect the property market, he said.
"It is believed that once the pandemic subsides, the social movement will add uncertainties to property prices," Lam said. "I believe that the residential property market will not plummet, but there will be no V-shaped or U-shaped rebound."
Lohas Park comprises 13 phases that will have a total of about 25,500 flats for about 63,000 residents. Previous projects such as Malibu, LP6, Montara and Grand Montara have sold hundreds of flats on the first days of sale, because of relatively cheaper prices. Wheelock Properties' Malibu, for instance, sold 750 flats in two days in March 2018.
Meanwhile, CK Asset recently started offering incentives such as shopping vouchers to boost sales of the remaining units at its Seaside Sonata development, which was launched in October 2019. Brokers Centaline and Midland Realty are also offering incentives such as iPads and Harbour City vouchers to those buying flats at Wheelock's Marini development through them.
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