SHKP tweaks project design again as Hong Kong’s housing flatline shows no pickup in sight

Sun Hung Kai Properties (SHKP) said it would tweak the design of its housing project in Hong Kong’s Tuen Mun district for the second time, as it buys time before adding to the city’s inventory of unsold homes amid a worsening property slump.

The project, developed with Hanison Construction Holdings, is undergoing “design changes [with] adjustments in the progress and work processes on site, [where] the temporary suspension of some of the works may not be ruled out”, according to a statement.

The move by Hong Kong’s most-valuable developer could herald more delays, as the discount war among competing builders gathers momentum amid deteriorating sales. SHKP, an industry bellwether in the market, said a redesign would require it to resubmit its paperwork to the government for approval before construction can begin anew.

The developer said it did not dismiss any staff due to the adjustment of the project, and that the affected workers would be reassigned to other projects.

“The main reason [for the project’s possible delay] could be the poor market conditions for the primary land sales in the New Territories,” said Alex Leung, senior director at CHFT Advisory and Appraisal.

The shell and core of SHKP’s residential blocks have been completed, Leung said, adding that he believes 60 per cent to 70 per cent of the construction cost has been incurred.

Hong Kong’s developers are scrambling to come up with strategies as a pipeline of 109,000 new homes may flood the city over the next three to four years, adding to the glut amid a sales slump. Rents are rising while sales prices continue to drop, as new emigrants to Hong Kong choose to lease instead of owning.

New residential projects in Tuen Mun and Kai Tak, with abundant land supply, have been aggressively slashing prices to attract buyers.

Still, SHKP is actively bidding for new land, and building new homes elsewhere. It plans to build 600 flats with 308,144 sq ft of permissible gross floor area on a site measuring 98,898 sq ft in Fanling through a land exchange scheme.