The development cycle will last for 22 years, and this mainland project will enter the market. Li Ka shing Hong Kong will sell the property at a 70% discount to Beijing | Project | Li Ka shing
Recently, Li Ka shing's sale of buildings at a 70% discount in Hong Kong has caused a stir in the industry, and the group's projects in mainland China have also received attention. Market news shows that the high-end project Yucuiyuan, located in Beijing under Changshi Group, will also enter the market, and the expected selling price is lower than the previous retail price.
On August 17th, a real estate consultant for Yucuiyuan Real Estate told reporters that the project has indeed obtained a pre-sale certificate, but it has not officially opened yet. The specific time will still be waiting for the developer to provide information. "After the pre-sale certificate is issued, it is estimated that it will be soon. We are waiting for the details now."
The reason why this project has received attention is partly due to the Li Ka shing family's sale of properties at a reduced price, and partly due to its rare long development cycle. Public information shows that the Yucuiyuan project is located in the Chaoqing area outside the East Fourth Ring Road in Beijing, which is one of the gathering places for high-end projects in Beijing. As early as more than 20 years ago, the Li Ka shing family included the project site in their portfolio.
In 2001, 22 years ago, Hutchison Whampoa signed an agreement with the Beijing Municipal Government to acquire a total area of 400000 square meters of Yaojiayuan land, with a total cost of approximately 700 million yuan. Based on this calculation, the floor price of the Yaojiayuan plot was only 1750 yuan/square meter at that time.
After obtaining the land, there was no news of the project starting construction until a construction contract was signed with relevant departments in Beijing in 2004, and construction officially began in 2005. In November 2005, the project was first launched for sale, and the average price of the first phase of the Yicuiyuan project was 9000 yuan/square meter, which has doubled compared to the ground floor price. By 2011, the second phase of the project, Yucui Shangfu, was launched, and the average transaction price had risen to 29000 yuan/square meter.
The Yucuiyuan sold this time is the second phase of Yicuiyuan, positioned as a high-end low-density residential area in the city. It is reported that Yucui Garden will be the last project developed by Hutchison Whampoa in Yaojiayuan, Beijing. Previously, it had developed Yicui Garden, Yicui Garden South District, Yicui Garden North District, and Yucui Shangfu in the area. The project is located in the mature area of the East Fifth Ring Road, and there are no commercial housing plots to be developed in the surrounding area.
The entry process of Yucuiyuan into the market is also extremely low-key and slow. After the project was named and unveiled in 2019, it was not until July of this year that the pre-sale certificate was obtained. In October last year, there were media reports that the Yucuiyuan project opened sales offices, with hair dryer prices starting at 100000 yuan/square meter. At the same time, capital verification was initiated, and buyers were required to provide proof of a down payment of 2 million or 8 million yuan.
However, on the 17th, the property consultant for the project stated that they can now go directly to view the property without any conditions such as capital verification. The real estate consultant is extremely cautious about the project's selling price, stating that the average price will be around 100000 yuan, and there will be fluctuations depending on the situation, with not too large a range. Even if calculated at around 100000 yuan per square meter, the project's selling price has increased by over 50 times compared to the land acquisition price at that time.
At the performance meeting held earlier this year, the management of Changshi Group stated that the real estate industry is cyclical and also a long-term development industry. In 2023, Changshi Group will accelerate the speed of building sales and hope that more projects will be completed and recorded as soon as possible. "If there is an opportunity to buy land at affordable prices and sell buildings at a lower price, buyers will be happy, and we will be happy," said Li Zeju, Chairman of Changshi Group.
On the land acquisition issue of external concern, Li Zeju stated that Changshi Group has strong competitiveness in controlling land costs. "Making different choices in different industries and cycles is our strength." He also stated at the annual shareholders' meeting at the beginning of the year that we will consider high-quality assets that can generate ideal returns, whether in Hong Kong, mainland China, or other regions.
On August 3rd, Changshi Group released its 2023 interim performance report, which confirmed property sales revenue of HKD 8.246 billion in the first half of the year, a year-on-year decrease of 59.6%; The revenue was HKD 3.53 billion, a year-on-year decrease of 56.2%. "The real estate industry continues to be affected by a challenging market environment, and the group's overall performance in the first half of the year met expectations. During the period, sales revenue of properties in Hong Kong and mainland China decreased compared to the same period last year."
