KUALA LUMPUR (May 13): Hong Kong developer Goldin Financial Holdings “has suffered the biggest loss on a land sale in the city's history” when it agreed to sell a “residential plot” on Kai Tak for an estimated loss of HK$2.57 billion (US$331.56 million) “to raise cash”, reported South China Morning Post (SCMP) yesterday.   

The company “cited the uncertain market outlook” for the sale as the Hong Kong economy reeled from the Covid-19 pandemic.

Such a massive loss from the reselling of government land “was unprecedented”, said Alex Leung, senior director at CHFT Advisory And Appraisal told SCMP

"Very few land parcels change hands. The market has reversed, and Kai Tak really has a higher risk as the supply there is relatively high.

“Land value there will drop more than land in urban areas such as Kwun Tong and Sham Shui Po,” said Leung.

The Hong Kong-based English daily also stated that the “resale price translates to HK$12,250 per square foot, bringing it back to a level last seen at Kai Tak in March, 2017”.

"The value of commercial land now is different from before. The economy now is very different, with the pandemic, the intensified US-China trade war, the social [unrest] and a combination of several negative factors," Charles Chan, managing director of valuations and professional services for Greater China at Savills explained.

The developer’s executive director Shirley Hui Wai-man said in a statement: "Considering the preliminary stage of development of the property and the significant capital required for the project, the directors adopted a prudent approach to retain more cash for the group's existing business, against the uncertain outlook in the property market and the overall economic downturn in Hong Kong," executive director Shirley Hui Wai-man said in a company statement.

"The proceeds from the disposal would be primarily used to reduce the group's borrowings, thereby enhancing its financial flexibility as a whole," she added.

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