The family of Ho Shung-pun, a low-key clan of real estate developers in Hong Kong, sold four mansions on The Peak for a 35-per cent discount to market prices to repay debt, sources said, as the city’s property woes have now extended to even the wealthiest elites of the population.
The town houses A to D at No. 46 Plantation Road on The Peak were sold on Wednesday for a combined HK$1.1 billion (US$141 million), according to government records. The four homes each measure between 4,060 and 4,432 sq ft (411.8 square metres) in size.
A buyer has paid HK$55 million, or 5 per cent of the sales price, as the initial deposit for the purchase, said Raymond Lee, the chief executive for Hong Kong, Macau and Greater China at Savills, which brokered the deal.
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“The buyer is a local with financial strength,” Lee said, declining to divulge the buyer’s name. “He paid cash and will complete the deal on August 8.”
The proceeds of the sale will be used to repay a HK$1.6 billion private loan extended by Gaw Capital due in January 2025, a source said. The loan was securitised against the property at 46 Plantation Road with an interest rate in the “teens”, the source said.
The transaction price works out to about HK$65,000 per square foot, about 50 per cent less than the valuation at the height of Hong Kong’s property market in 2017, Lee said.
The present market value of residential property along Plantation Road is about HK$100,000 per square foot, according to an agent. A 3,221 sq ft house at 51 Plantation Road is currently asking for HK$340 million, or HK$105,000 per square foot, the agent said.
The Ho family’s sale puts downward pressure on other luxury homes in the city, Savills Lee said.
Hong Kong’s property market is wallowing in a slump, as a rebound after the removal of a stamp duty in February turned out to be a short-lived blip. Developers have had to slash prices by up to 30 per cent to attract buyers, as investors and owner-buyers opted to stay on the sidelines amid a supply glut and high interest rates.
The slump is now hurting even the most esteemed segment of Hong Kong’s society, snaring distressed developers and wealthy families who had turned to the private credit market for financing. The private credit asset class in Asia-Pacific, including Hong Kong and mainland China, reached US$81.3 billion in 2022 and is expected to exceed US$100 billion by 2027, according to Preqin.
Ho, in his 80s, is a former mathematics professor at the Hong Kong Polytechnic University. He and his relatives are the directors of Kowloon Investment, a property investment and management company established in 1955, according to the Companies Registry. The company’s real estate portfolio includes the Portofino Villa and Portofino luxury apartments in Clear Water Bay and a 12-storey commercial building in Mong Kok.
The family could not be reached for comment.
The town houses on 46 Plantation Road, completed in 2007, were put up for sale by tender in February 2023 after Ho encountered liquidity stress, sources said. The family obtained a one-year HK$85 million loan on January 17 from X8 Finance, a wholly owned unit of Hong Kong-listed Termbray Industries International, a stock exchange filing showed.
The loan, carrying an annual interest rate of 29 per cent in the first two months of its drawdown, and 18 per cent thereafter, used another Ho family property as collateral. The loan was taken out to refinance a HK$44 million facility taken out in June 2023 that carried an interest rate of 25 per cent per annum in the first month, and 13 per cent thereafter.
The sale by the Ho family was hardly unique. A mansion sold by Savills earlier this year at 25-26 A&B of Lugard Road on The Peak fetched HK$838 million, or HK$71,703 per square foot, at a 35 per cent discount to market prices.
More from South China Morning Post:
- Hong Kong luxury property owners turn to high-interest private loans for relief from liquidity pain
- Luxury Hong Kong mansion on The Peak sells at 35% discount for US$107 million to company linked to Mindray founder
- Hong Kong property: home prices slump to lowest since January 2017 as high interest rates undercut demand
- Hong Kong faces new-home glut in 2023 as more than 40,000 flats could hit the already shaky property market
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