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HK businessman pays HK$7.6m for parking space

Hong Kong

HONG KONG might be heading for recession after months of violent protests but that hasn't stopped one businessman from forking out almost US$1 million for a parking spot.

The mind-boggling sum paid by Johnny Cheung Shun-yee highlights the gaping inequality that has helped fuel nearly five months of demonstrations in the financial hub, where one in five people lives below the poverty line.

The HK$7.6 million (S$1.32 million) price tag is more than 30 times the average annual wage in Hong Kong and about the same as a one-bed apartment in London's plush Chelsea area.

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It is situated in The Centre, the city's fifth-highest skyscraper, which hit the headlines in October 2017 when it became the world's most expensive office building after Hong Kong's richest man sold it for more than US$5 billion.

The purchase comes even though there are growing concerns about the impact of the pro-democracy demonstrations on the city's real estate market with property firms' share prices plunging in recent months, as they are forced to offer discounts on new projects and cut office rents.

The economy has been tipped to grow just 0-1.0 per cent this year, the worst rate since 2009 during the global financial crisis.

"A lot of those owners in The Center are in finance or in other high-growth businesses," Stanley Poon, a managing director at Centaline Commercial, said.

"To these tycoons, it's not a significant purchase if you compare it to the value of the office floors they own."

Hong Kong's white-hot property market has become a political issue as costs continue to soar, forcing some small businesses to close owing to sky-high rents while many residents cannot afford to buy or lease decent homes.

Commercial and residential property prices have been fuelled by an influx of money from wealthy mainland Chinese investors and developers. BLOOMBERG