A luxury residential property belonging to the United States Consulate General on Hong Kong Island has been sold at the price of HK$2.566 billion (US$331 million) to Hang Lung Properties.

CBRE Group, which was hired to dispose of the property, confirmed the selling price. It is nearly half the price of the neighboring plot, 39 Shouson Hill, when it was sold to a Chinese developer at HK$5.9 billion (US$761 million) in 2018.

Hang Lung Properties (101), chaired by property developer Ronnie Chan, has confirmed that they won the closed tender. It is rare to see a plot in the highly sought-after district in the market and the price is reasonable, said the group. The purchase is a vote of confidence in Hong Kong’s future, it added.

The group is investing HK$4 billion (US$516 million) to redevelop the plot into multiple mansions, expected to be completed in 2024.

The last time Hang Lung bought land in Hong Kong was 20 years ago and has rarely developed any properties in the city since then.

The project has accepted bidding offers for four months. Estimation of its market value was at one point as high as HK$10 billion (US$1.29 billion) and mostly around HK$6 billion (US$774 million). It was sold at HK$2.566 billion (US$331 million) in the end, which works out to HK$54,138 (US$6,984) per square foot, 40% lower than that of the neighboring plot 39 Shouson Hill, which was sold at HK$80,000 (US$10,321) per square foot.

Charles Chan, Managing Director of Valuation & Professional Services at Savills, believed the price matches the market’s expectation because the current property market cannot be compared to that two years ago. Near HK$50,000 (US$6,451) per square foot is not a low price, he added. The developer would also have to pay an extra HK$1 billion (US$129 million) for land premium.

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