Hong Kong property company New World Development’s (NWD) Pavilia Farm project has been a bright spot in an otherwise dismal year for the city’s real estate sector.
The project, developed in partnership with transit operator and property developer MTR Corporation, has sold about 2,100 units in around six weekends for almost HK$23.8 billion (US$3.06 billion).
NWD reported sales of HK$26.4 billion in the first 11 months of this year, which may help it displace Sun Hung Kai Properties (SHKP) as Hong Kong’s biggest property developer by sales this year. SHKP, which has been the city’s biggest developer since 2016, reported sales of about HK$24 billion in the same period, shows data from provider Dataelements, which covers new residential property in Hong Kong. SHKP, however, remains a dominant player, launching new projects almost every month. For instance, it is expected to launch its St Michel project in Sha Tin in January.
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Homebuyers have flocked to Pavilia Farm despite downbeat sentiment because of its quality, pricing and location. The project has been anticipated since NWD acquired the rights to develop the plot, which is owned by MTR Corporation, and its third phase, to be launched early next year, is also expected to be popular.
“Even people who had not planned on buying homes, or investing in property, wanted to lay their hands on it, as they think its prospects are good,” said Mark Chau, deputy district sales director of Centaline Property Agency. He said about 30 of his clients had been unable to buy flats because of the high demand and limited supply.
The developer said phase one of the project had received more than 22,000 registrations of intent from potential buyers. More than 2,100 units were sold during phases one and two in just over a month.
Proximity to important hubs such as Kowloon Tong and Sha Tin, its location on the Sha Tin-Central link, the large shopping centre being developed on site and NWD’s growing reputation had added to Pavilia Farm’s alure, Chau said.
The quality and design of projects such as the K11 Musea shopping centre and Rosewood hotel in Tsim Sha Tsui had boosted NWD’s credentials, especially among younger buyers, Chau said. He added that the improvements might be down to a bigger investment and efforts by Adrian Cheng Chi-kong, NWD’s 41-year-old executive vice-chairman. The developer’s status among buyers was “on par with Sun Hung Kai. In the past, it was always [led by] Sun Hung Kai”, Chau said.
Pavilia Farm is the first new project in Tai Wai by NWD and MTR Corporation since their collaboration on The Riverpark in 2012 at Che Kung Temple station.
Sales at the development were the biggest since the sale of CK Asset Holdings’ Ocean Pride in Tsuen Wan, which sold 2,100 flats for about HK$25 billion in 2017, said Daniel Choi, manager of Qfang’s Hong Kong Data Research Centre.
He said the sales of new homes this year had declined because of the coronavirus pandemic, which had led to fewer launches. He added that he expected sales of new homes next year to reach 18,000 transactions, a level last seen in 2017.
Sales at the project have been “unbelievable”, said Dennis Lam, district sales director at Midland Realty. He added that the sales will not make agents millionaires, but just help them survive.
Lam oversees operations in Tai Wai, and the team there sold about 210 flats, or 10 per cent of total sales. He said sales at Pavilia Farm had helped agents in close-by areas recover sales to pre-pandemic levels, but that would not be considered a boom. In a boom, business would be three or four times more than current levels, he added.
Property agencies earned a commission of 2.5 per cent on the project, but many have had to offer rebates to buyers. And agents only get about 10 per cent of the commission their agency earns. This means an agent got just HK$16,236 for the sale of a flat worth HK$12.99 million, assuming half of the 2.5 per cent was returned to the buyer as rebate. There are usually no bonuses or rewards for them.
Lam said that on average one in 10 agents in Sha Tin and Tai Wai struck a deal for Pavilia Farm.
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