Units at New World Development’s grade A commercial building in Cheung Sha Wan, Hong Kong were snatched up in two rounds of sales on 12 and 17 December, taking just one hour each to hit HKD 1.3 billion for total of 74 units. In spite of the pandemic’s fourth wave, and with the benefit of the removal by the Hong Kong Government of double stamp duty on non-residential property transactions, the two sales launch were a record-breaker.
New World Development recently announced its price list for No. 888, Lai Chi Kok Road, Cheung Sha Wan, and this became the first commercial property to go on sale following the elimination of the double stamp duty on non-residential property transactions. The average price per sq. ft. of the second round of 44 units released onto the market was HKD 13,275, with the cost of each unit ranging from HKD 7,341 million to HKD 33,737 million.
Adrian Cheng, Executive Vice Chairman and Chief Executive Officer of New World Development said: “In spite of the pandemic, the Group has achieved splendid sales results for its Grade A commercial block at No. 888 Lai Chi Kok Road. This resounding success follows New World’s record-breaking achievement in launching The Pavilia Farm, and represents a strong affirmation from the market of the New World brand. The Group’s forward-looking strategy, designed to recognise the potential of opportunities like the new CBD in Cheung Sha Wan, successfully anticipated the rising demand for high-quality commercial properties.”
According to market reports, one investor spent more than HKD 300 million to purchase a mid-level full-floor unit with a total floor area of sq. ft. It is reported that a total of 9 large transactions were recorded in the two rounds of sales of the project, reflecting a strong demand for high-quality commercial buildings in the area.
The success of these launches reflects a renewed positivity in the commercial property market as a result of the reduction in stamp duty and a fourth quarter rebound linked to the low interest rate. “Investors are keen to acquire quality assets that will bring about handsome returns,” Adrian said.
As a result of the policy to revitalize industrial buildings, the Cheung Sha Wan area has changed significantly, with many industrial buildings being successfully transformed into commercial developments. With its infrastructure now complete and fully-equipped, Cheung Sha Wan is only 30 minutes away from Hong Kong International Airport and the Shenzhen Bay Bridge, and the area is perfectly positioned to become Hong Kong’s next core business district.
In 2017, New World Development began the acquisition process for three commercial sites in the district with a GFA of nearly 1.9 million sq. ft. No. 888 Lau Chi Kok Road will be modified to create a 28-story Grade A office building with a floor area per unit ranging from 502 to 2,613 sq. ft., with a total floor area that comes to around 24,044 to 24,426 sq ft. Completion is expected in April 2022.
This year, and in spite of the precarious business conditions arising from the coronavirus pandemic, New World has been active in launching property sales. The Pavilia Farm, the Group’s landmark residential project in partnership with MTR, has seen a brisk take-up with more than 2,100 units sold in just over a month. This has brought the Group’s total revenue to more than HKD 23.8 billion, easily allowing it to meet its annual sales target of HKD 20 billion, and well ahead of schedule.