November 7, 2012 / 11:24 AM / 5 years ago

HK sells residential sites to Cheung Kong, Sun Hung Kai for $697 mln

HONG KONG, Nov 7 (Reuters) - Hong Kong sold two plots of land for residential use on Wednesday for a total of HK$5.4 billion ($697 million), stepping up supply in the latest move to cool the city’s house prices which are among the highest in the world.

Sun Hung Kai Properties Ltd, Hong Kong’s largest property developer by market value, and Cheung Kong (Holdings) Ltd, controlled by Asia’s richest man Li Ka-shing, confirmed they had each bought a site.

Cheung Kong said it won the tender for the site in the New Territories district of Shatin, about 40 minutes by train from the heart of the financial district.

It was sold for HK$2.9 billion and could accommodate as many as 463 residential units, the government said in a statement.

Sun Hung Kai, controlled by Hong Kong’s billionaire Kwok brothers, bought the other plot for HK$2.5 billion in Tseung Kwan O, also in the New Territories, which can accommodate up to 630 apartments.

Sky-high property prices, which jumped 20 percent in the first nine months of this year even as the economy contracted 0.1 percent in the second quarter, have put homes out of the reach of many Hong Kong residents.

The government imposed a new tax on non-resident and corporate buyers of property last month and has said it may take further measures to control property prices.

The Hang Seng Property Index, a sub-index that tracks the seven Hong Kong and two Chinese developer stocks that are components of the Hang Seng Index, fell around 4 percent after the measures were imposed last month.

The index has since recovered around 5 percent since then.

The moves to cool speculation come after a third round of quantitative easing by the U.S. Federal Reserve spurred capital inflows to the former British territory.

Hong Kong’s yawning wealth gap and protests over soaring property prices have posed significant challenges for the city’s leader Leung Chun-ying, who took over as chief executive on July 1.

$1 = 7.7502 Hong Kong dollars Reporting by Alison Leung; Editing by Sanjeev Miglani

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