China developers slash prices by 40% at luxury Hong Kong project

DISTRESSED Chinese developers trying to sell luxury apartments at a new complex in Hong Kong have begun slashing prices by almost half amid mounting debt repayment pressure and intensifying competition in the city’s property market.

Prices of some units at the first tower of The Corniche have been reduced to around HK$25,000 (S$4,356) per square foot, according to promotional materials seen by Bloomberg. That represents a more than 40 per cent discount from the original asking price of HK$45,000.

The six-tower project was developed by Logan Group and KWG Group Holdings, which have only managed to sell five of the 295 apartments since marketing began in January 2023. They were sold for between HK$40,000 and HK$50,000 per square foot, according to Bloomberg calculations based on transaction data, with the most recent in January.

Other perks for prospective buyers include allowing as long as 120 to 180 days to make downpayments, said the people.

Logan declined to comment. KWG representatives couldn’t be reached for comment.

Logan and KWG took out a HK$10.2 billion syndicated project loan against The Corniche that’s maturing by the end of August.

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Alternative investment manager Ares Management has sent a proposal in recent weeks to some banks to buy out a stake in the loan at around 95 cents on the US dollar.

Both Logan and KWG have defaulted on their offshore debt during China’s ongoing property downturn and are now in restructuring talks with creditors.

The property in the Southside area on Hong Kong Island is expected to be a key asset in the negotiations.

Hong Kong’s residential market has slid on high interest rates, population outflows and concerns about the economy. In February, local authorities scrapped cooling measures on housing, triggering a surge in sales but doing little to alleviate downward pressure on prices.

The Corniche’s discounts come just as another Southside development, CK Asset Holdings’ Blue Coast, drew much hype for its low prices.

The project, which CK Asset said is priced below cost and more than 20 per cent cheaper than apartments nearby, was more than 50 times oversubscribed during a recent sales launch.

UBS Group expects Hong Kong’s residential property values to decline a further 5 per cent this year. With homebuyers choosing to buy new homes amid a slew of launches, prices in the secondary market have come under pressure. BLOOMBERG