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.
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| 75 Peak Road, Hong Kong (aka Ho Tung Gardens) |
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| A closer look at 75 Peak Road. The mansion was built in 1927 and demolished in 2013. |
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| Robert Hotung in 1916. At one stage he was said to be the richest man in Hong Kong. |
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| 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. |
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| 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. |
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| Sir Robert entertained George Bernard Shaw at Ho Tung Gardens in 1933. |
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| 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.
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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
