Li Ka-shing’s real estate project in Chaoyang District, Beijing, recently held its grand opening with a direct sale of discounted homes at 24% off, offering prices lower than nearby second-hand homes.
According to mainland media Caifeng Society on October 28, the “Yucui Garden” project located in the East Fourth Ring Road of Chaoyang District, Beijing, developed by Li Ka-shing’s Cheung Kong Industries and Hutchison Whampoa Real Estate, recently opened for sale.
Sales staff at the project revealed to Caifeng Society that they have launched 50 sets of discounted homes in the past few days: “The discounted homes are priced as low as 75,000 yuan to 76,000 yuan per square meter, with unit sizes of 140 square meters, 180 square meters large flats, and row houses. Currently, these unit types are all available for sale. Due to prices being cheaper than nearby second-hand homes, there was a significant influx of customers visiting the property over the weekend.”
The report indicated that compared to the previous recorded prices of 90,700 yuan to 99,700 yuan per square meter, the discounted homes are priced at a reduction of nearly 15,000 yuan to 24,000 yuan per square meter. Calculated this way, the sale price of the discounted homes is a maximum of 24% lower than the recorded highest price.
The Yucui Garden project has been developed for 23 years since Li Ka-shing’s first residential project in Beijing.
Public records show that the Yucui Garden project is developed by Hutchison Whampoa Real Estate (Beijing Chaoyang) Co., Ltd., a subsidiary of Cheung Kong Industries. In 2001, Li Ka-shing acquired the project for 700 million yuan with a floor price of only 1,750 yuan per square meter.
As per the Beijing Municipal Commission of Housing and Urban-Rural Development website, Yucui Garden obtained pre-sale permits for nine buildings on July 18, 2023, with an average selling price range of 90,700 yuan to 99,700 yuan per square meter. Besides these nine residential buildings, Yucui Garden also has five high-rise residential buildings and 12 row houses that are not included in the current sale.
Over the past twenty years, the recorded sales price of Yucui Garden has increased over fifty times compared to the land price. Analysts pointed out that even with the discounted sale at 24% off, the selling price has increased nearly fifty times compared to the land price at acquisition.
This is not the first time Li Ka-shing has offered discounts on property in China.
In July this year, Li Ka-shing’s “Seaview Mansion” project in Dongguan was selling available units at half price, with the lowest price per square meter at 13,000 yuan, compared to the previous price of 30,000 yuan per square meter, equivalent to a 50% discount.
A senior executive of a major real estate agency once stated that when the market is uncertain, Cheung Kong Group always leads by reducing prices. As a developer, they need to consider opportunity costs, hoping to quickly recover funds while maintaining profitability. If they choose to hold onto inventory, developers may be impacted in two areas: holding costs and potential income returns on cash.
The news of Li Ka-shing’s discounted property sales has sparked discussions among netizens.
User “Karawa” commented, “Is the Beijing real estate market about to crash? You can doubt Li Ka-shing’s character, but don’t doubt his vision.”
“Ride the Wind” questioned, “What is his purpose? Signaling the downturn in the real estate market.”
“Niu Ge” expressed, “Li Ka-shing seems to have a prophetic eye, decisively divesting inland assets at a certain time, leaving many private sector tycoons regretting not following suit.”
“Mushroom Tomorrow” lamented, “Many domestic real estate properties are reducing prices, smart people see the central bank easing, immediately selling off massively, waiting for this wave to pass without transactions to continue falling.”
As early as 2013, Li Ka-shing observed a change in the political landscape of the Chinese Communist Party and began to sell off his Chinese assets frequently, while the Chinese real estate market was booming. Li Ka-shing’s actions once drew high attention from the CCP, with Xinhua News Agency’s “Outlook Think Tank” publishing an article titled “Don’t Let Li Ka-shing Run Away” in 2015. Subsequently, as China’s real estate market gradually declined into a trough, people began to admire Li Ka-shing’s unique insight.