Hong Kong mansion at The Peak sells for US$107 million, at 35% discount

A mainland Chinese buyer snapped up an ultra-luxury house at The Peak in Hong Kong at a 35 per cent discount, reflecting the still lukewarm atmosphere in the city’s luxury property market.

The mansion, 25-26 A&B Lugard Road, sold for HK$838 million (US$107 million), or HK$71,703 per square foot, according to Godfrey Cheng, deputy senior director of the investment CEO office at Savills Hong Kong, the sole agent for the property.

The sale is linked to Shenzhen entrepreneur Xu Hang, co-founder and director of Shenzhen Mindray Bio-Medical Electronics, through a company set up in December by a director who shares the same name as his wife, Gu Fang, according to people familiar with the matter. Savills declined to identify the buyer.

“The luxury property market is less active, and the number of buyers has been reduced, which was reflected by the discounted price,” Cheng said. “It was mainly due to a slower-than-expected economic recovery in mainland China, as well as stricter capital-outflow controls.”

The two-storey detached house went on the market in October and was valued at HK$1.3 billion, according to Savills. The mansion occupies a site area of 31,544 sq ft, with a maximum gross floor area of 11,687 sq ft.

The transaction incurred a total of 15 per cent or HK$126 million in stamp duties, specifically the Buyer’s Stamp Duty and the New Residential Stamp Duty, which were halved from 15 per cent to 7.5 per cent, respectively, in October.

The previous owner of the residence was the family of Tsim Wing-kong, a local toy merchant, which bought the property for HK$145 million in 1999, according to filings from the Land Registry. Holding onto the home for 25 years netted the family a profit of about HK$700 million.

Some buyers are still interested in rare properties that have unique locations, said Savills’ Cheng.

Lugard Road is one of the most prestigious areas on The Peak, with only 12 residential lots, of which four enjoy unobstructed views of Victoria Harbour, Savills said.

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Hong Kong’s luxury property prices dropped by around 8 per cent in 2023 and 15 per cent from the peak in July 2018, according to CBRE.

While the market remains relatively subdued, there are signs that buyers are returning. A total of 173 deals involving units priced at US$10 million or above were recorded last year, a 31 per cent year-on-year increase, according to Knight Frank. Volumes rose 13 per cent year on year to HK$25.5 billion.

Last week, two brand new properties totalling HK$1.2 billion were bought by different mainland Chinese buyers, according to CBRE Hong Kong.

Chinese buyers return to Hong Kong’s luxury property market as activity picks up

An 8,583 sq ft duplex penthouse at Kerry Properties’ Mont Verra, in Beacon Hill, Kowloon Tong, sold via tender for HK$619 million, or HK$72,119 per square foot.

Another luxury villa, a 4,579 sq ft unit at 8 Mount Nicholson Road, The Peak, also sold by tender for HK$600 million, or HK$131,033 per square foot. An identical property in the project, developed by Wharf Holdings and Nan Fung Group, fetched the same price in 2017, making it Asia’s most expensive residence.

Mindray grew significantly early in the pandemic when demand for ventilators jumped. The company benefitted from Beijing’s prod to reform the nation’s healthcare system since 2015, as hospitals were required to switch to selling services from selling medicines for income, which stimulated the demand for medical equipment and related materials.

But Xu lost about US$2.3 billion last year as the country’s top regulators started a sweeping anti-corruption campaign across the nation’s healthcare sector.