Hong Kong developer sells HK$538 million luxury mansion at a loss

[HONG KONG] Hong Kong developer Chuang’s Consortium International is selling a luxury mansion in the upscale Deep Water Bay area at an almost 20 per cent discount, as it seeks cash in a fragile property market.

The house at 37 Island Road is being sold to Annex W Group, a British Virgin Islands vehicle owned by Wu Jingtao, for no more than HK$538 million (S$88.1 million), according to a filing to the Hong Kong stock exchange late on Thursday (Jun 19). 

Chuang’s Consortium will record a loss of HK$143.2 million, mainly due to accounting treatment based on the market valuation rather than the cost of development, it said in the filing.

The sale would become the third-largest transaction for a new home in Hong Kong this year, after a HK$1 billion villa in the Mont Verra project and a HK$609 million penthouse at Mount Nicholson, according to property database EPRC.

Chuang’s said the main reasons for the sale included a need to improve the group’s liquidity, uncertainty in the Hong Kong property market and the global political environment, and thin transaction volumes for luxury property.

The developer, which specialises in high-end projects, is known for selling a mansion to mainland Chinese tycoon Chen Hongtian for more than HK$2 billion in 2016.

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The house was seized after Chen defaulted on a loan, and was recently on the market for 60 per cent lower than its purchase price. BLOOMBERG