li ka-shing's companies under ck asset have been developing residential projects in peking for as long as 23 years, and recently started selling them at a discount.

There are market reports that Li Ka-shing's "Regal Gardens" project located in the Dongsihuan area of Peking was launched recently, directly offering at a 24% discount, with special priced units at only 0.076 million yuan/square meter, lower than the price of nearby second-hand properties.

In response to this, the salesperson of the project informed reporters that the property did indeed launch 50 special priced units in the past few days, with an average selling price for special priced units as low as 0.075 million yuan/square meter - -0.076 million yuan/square meter. The unit types are 140 square meters, 180 square meters large flat layers, and townhouses in a row. Currently, these unit types all have units available for sale.

Based on the previously recorded price range of 0.0907 million yuan - -0.0997 million yuan/square meter for this project, the selling price per square meter of special priced units this time has decreased by nearly 0.015 million yuan - -0.024 million yuan. Therefore, calculated based on this, the selling price of special priced units this time is at the highest price relative to the recorded price, equivalent to a 24% discount.

"Because the prices are even cheaper than the prices of surrounding second-hand properties, there were many customers visiting to view the houses last weekend, they had to wait in line, and one salesperson even had to handle 5 customers." the property consultant mentioned to reporters.

"Although after the policy on September 30, there was a significant recovery in transaction volume in the Peking market, but from the current price trends of projects on sale in the market, there are quite a few projects offering significant discounts on prices, many projects are applying a 30% discount on top of the guide price." Guo Yi, the chief analyst at Hasco Institutions, told reporters.

Furthermore, he stated that the low opening price of Regal Gardens is in line with the current market environment, indeed stimulating market demand and enhancing the project's popularity. It is expected that after the launch of 50 special priced units this time, the remaining units for sale will see a price increase.

It is noteworthy that the Yu Cui Yuan project has been developed for 23 years since the land acquisition, and it was also the first residential project in Beijing when Li Ka-shing entered Beijing that year.

Public information shows that "Yu Cui Yuan" was developed by Yangtze River Industries' subsidiary Hopson Development (Beijing Chaoyang) Co., Ltd. According to multiple media reports, the Yaojiayuan project site where "Yu Cui Yuan" is located has a total area of ​​approximately 0.4 million square meters. Hopson Development acquired it in 2001 for 0.7 billion yuan, with a floor price of only 1750 yuan/square meter.

Four years after the land acquisition, CK Asset developed the first phase of the Yi Cui Yuan, which opened in 2005, and then entered a long marathon-like "development" phase. More than 20 years after the land acquisition, the second phase of the project, Yu Cui Yuan, was only launched in the market this year.

According to the official website of the Beijing Municipal Commission of Housing and Urban-Rural Development, Yu Cui Yuan obtained a pre-sale permit on July 18, 2023, with a total of 9 buildings, including 3 high-rise buildings and 6 row houses. The permitted sales area reached 0.0932 million square meters, totaling 473 units, including 77 row houses and 396 high-rise products, with the planned average selling price in the range of 0.0907 million yuan to -0.0997 million yuan per square meter. In addition to these 9 residential buildings, Yu Cui Yuan also has 5 high-rise residential buildings and 12 row houses not included in this sale.

Over the past twenty years, companies under Li Ka-shing have also benefited from the land appreciation brought about by price increases. The recorded sales price of Yu Cui Yuan has increased by more than fifty times compared to the land price. Analysts point out that even if sold at a 22.4% discounted price, compared to the land price at that time, the selling price has still increased nearly 50 times, making substantial profits.

In fact, before this, projects launched by Li Ka-shing's companies in mainland China and Hong Kong have also been sold at discounted prices, with discounts once reaching 50%. In July of this year, Li Ka-shing's "Haiyi Haoting" project in Dongguan was sold at a 50% discount, with a minimum unit price of 0.013 million yuan/square meter, compared to the highest price of 0.03 million yuan/square meter previously, equivalent to a 50% discount.

In addition, the Blue Coast project at the Southern Hong Kong Island South Harbour Station developed by Li Ka-shing's company opened on April 6th, with an opening price more than 6,000 Hong Kong dollars lower than other projects in the same area, referred to as a "bottom-fishing price", compared to the prices of surrounding existing homes, equivalent to a 30% discount, triggering a rush to buy; on April 22nd, Yangtze Industries' luxury project, May 9 Butsumi in Shatin, Hong Kong, also reduced unit prices by 23% to 32%; and on May 19th, Yangtze Industries launched the "#LYOS" residential project in Hong Kong's New Territories at the highest price reduction of 25% and 32% for 14 split-level units and 14 duplex units.

A senior executive of a large real estate institution once said, When the market is unclear, $CK ASSET (01113.HK)$Always taking the lead in lowering prices, as a developer, one needs to consider opportunity cost. Of course, they hope to recover funds as soon as possible while also making a profit. If they choose to hold inventory, developers may be affected in two ways: holding costs and the potential income return cash can generate.

Regarding the reasons for the frequent price reductions of its projects, CK Asset's Chairman and CEO Li Zeju stated at the 2024 annual shareholder meeting, "The pricing of properties cannot be generalized, as pricing is determined based on the unique conditions of each property, including its location, transportation, surrounding environment, and the market conditions at that time."

Editor/Rocky