23 January 2015

Gentlefolk,

It must be something special to get me out of blog-hibernation.

The billion dollar house

Yesterday Hong Kong media reported that a property at 75 Peak Road had sold for HK$5.1 billion. The buyer had to pay an additional $1.2 billion in taxes, making the deal worth a total of HK$6.3 billion.

At today's exchange rate, that translates to a fraction over A$1 billion (or about US$800m)!

And you thought Australian real estate prices were out of control?

The buyer was Season Glitter, a company controlled by Cheung Chung Kiu a billionaire businessman based in Chongqing with interests in Hong Kong.  In an effort to dampen demand from outsiders (particularly mainland Chinese), a couple of years ago the HK government introduced high taxes on property purchases by outsiders, hence the huge $1.2 billion in taxes on this transaction.

Did Mr Cheung get hectares of land and a castle for his A$1 billion?  No.  He got an empty block of 124,000 sq ft (about 11,000 sq meters), with a buildable area of about 50%.

No. 75 Peak Road has an interesting history.  In 1924 it was bought by Sir Robert Ho Tung Bosman (1862-1956; Dutch father, Chinese mother; usually referred to as Robert Hotung) who built a mansion on the property surrounded by landscaped gardens.  It became known as Ho Tung Gardens.

Apparently Sir Robert preferred living in his other residences and mainly used #75 to entertain visitors.

His will stipulated that the property could not be sold until at least the 3rd generation.  His grand-daughter Ho Min Kwan decided to re-develop.  The HK government considered keeping the estate for historical reasons, but could not agree on terms with Ms Ho (she wanted $7b, the govt offered $3b).  In 2013 the mansion was demolished, and the land has now been sold to Mr Cheung.

75 Peak Road, Hong Kong (aka Ho Tung Gardens)

A closer look at 75 Peak Road.  The mansion was built in 1927 and demolished in 2013.

Robert Hotung in 1916.  At one stage he was said to be the richest man in Hong Kong.

When his first wife could not have children she arranged for Robert Hotung to marry her cousin, who bore him 3 sons and 7 daughters.  The Americans took a dim view of polygamy when the family visited the USA in 1908. Apparently it was legal in Hong Kong until 1971 for wealthy Chinese to have more than one wife. 

Robert Hotung identified more with Chinese than Europeans, perhaps because his Dutch father, Charles Bosman, abandoned the family when he moved to London (Robert was about 8 years old). Robert made his fortune as Chief Compradore of Jardines, a leading British merchant company in Hong Kong. 

Sir Robert entertained George Bernard Shaw at Ho Tung Gardens in 1933.

Ho Min Kwan, Sir Robert's grand daughter, could not come to terms with the HK Govt.  She demolished the mansion in 2013 and finally sold the property in January 2015.

I can't quite get my head around the fact that 11,000 sq m can cost A$1 billion.  It's a crazy world.
...

We leave Hong Kong tomorrow for Australia.

Did you see the Socceroos beat China last night?  Tim Cahill scored two great goals to put us into the semi-finals of the Asian Championships.  And the Australian Tennis Open is on at the moment in Melbourne.  Lots to look forward to.

We've enjoyed our almost-two weeks in Hong Kong.  It's an incredible city - so crowded, so intense, yet works so well (the New York of Asia).

Something that always surprises/intrigues Australians about Hong Kong is that every second car seems to be a luxury brand: mostly Mercedes or BMW, with the occasional Rolls and Bentley thrown in.  How can there be so much wealth in such a small place?

Best wishes, alex & vera olah
Hong Kong,
Friday 23 January 2015