Hong Kong luxury land plot prices below expectations

[HONG KONG] The sale of a plot of land on the exclusive southern side of Hong Kong Island fetched less than what analysts had expected, making it the latest in a string of government land sales to do so.

Property is a major component of the Hong Kong economy and investors are closely watching government land sales for signs of further cracks in one of the world's most expensive property markets.

The last government land sale that priced below expectations was in mid-February, while two other tenders were recently cancelled.

The government said last month it would be willing to accept lower premiums on land sales amid weaker economic growth.

The 25,300 square-metre plot on Wong Ma Kok Road in Stanley sold to K&K Property Holdings subsidiary K Wise for HK$2.81 billion (S$499.86 million) on a 50-year land grant, the Lands Department said.

Midland Surveyors had expected the plot of land to fetch HK$4.52 billion and Icon City Group had expected HK$3.8 billion. The selling price was 32 per cent below the median of the estimates.

Moody's Investors Service downgraded its outlook on Hong Kong's sovereign credit rating to negative last Saturday, on risks from mainland China's growing political influence in the territory and its slowing economy.

REUTERS