Hong Kong sets commercial property record

HONG KONG - Hong Kong's commercial property prices have soared to a historic high, the city's biggest realtor said on Tuesday, frustrating government efforts to cool one of the world's priciest real estate markets.

A 79th floor unit in The Centre, a downtown skyscraper owned by Hong Kong's richest man Li Ka-shing, recently sold for 338 million Hong Kong dollars ($44 million), or about 25 580 Hong Kong dollars a square foot, according to government data.

"This is the highest commercial property price per square foot in Hong Kong's history," said Peter Chan, senior regional sales director of Hong Kong's largest property agency, Centaline.

Government records show the unit was sold in late October to Excel Fine Holdings, which local reports say is a Korean investment fund.

Chan said the southern Chinese city's commercial real estate prices will likely continue to rise over the next six months.

"There is definitely potential for prices to rise beyond present levels," he said.

"Right now, the vacancy rates of offices is very low... I expect to see more record prices in the next six months," he added.

Another office unit in the city sold in October for 24 950 Hong Kong dollars per square foot, according to the Chinese-language Sing Tao Daily.

Hong Kong has also claimed top spot in the world for the most-expensive office rent at $161 per square foot, according to a real estate review by Colliers International for the first half of 2010.

The Global Office Real Estate Review put London in second spot at $130 a square foot and Tokyo in third at $101.

The latest property data come amid fears of a property bubble in Hong Kong, a densely populated city of seven million that is also famous for its sky-high residential rents.

The chief of Hong Kong's de facto central bank warned earlier this month that a recently announced stimulus package to kickstart the US economy could escalate the city's already overheated property market.

Hong Kong's government has unveiled a host of measures aimed at reining in the property market, including holding land auctions to boost supply and tightening mortgage lending.

The measures appear to have dented the volume of property transactions, but prime land still fetches giddy sales figures.

Luxury home prices in the former British colony recently topped their pre-Asian financial crisis peak in 1997, according to government data released in October.

Average prices for homes of at least 100 square metres (1 100 square feet) were 14 % above what they fetched before the 1997 downturn, according to the figures.


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