Fate of Unsold Luxury Apartments, Transformed into Waste Processing Facilities, Empty Like a Cemetery

Dream - Not all luxurious apartments with many facilities will make developers' wallets thicker. Some have to suffer losses because the grand buildings they built end up being uninhabited structures. 

This is happening to an apartment in Hong Kong called The Corniche, which was supposed to generate sales of US$3.8 billion or equivalent to IDR 57 trillion. 

However, in reality, until now, the sale of these luxurious apartments with a view of the South China Sea has not attracted residents. 

The Corniche apartment building itself consists of 295 units. However, out of that many units, only three have been sold so far. 

The lack of buyers has left many apartments in The Corniche empty, making it feel eerie to walk along the apartment corridors.

Even since it was built six years ago, the surrounding environment of The Corniche has not supported it as a luxurious and grand apartment.

The apartment building is now surrounded by waste processing facilities and driving schools. The nearest shopping center has also turned into a kind of clothing and furniture market.

The current condition of The Corniche is now a headache for its developers, Logan Group Co. and KWG Group Holdings Ltd. The financial condition of these two developers is now threatened because the apartment is not selling. 

The creditors have demanded payment from both companies after they failed to pay their debts. Logan Group and KWG Group Holding may lose their luxurious apartment if the banks demand repayment of the debts.

The root cause of The Corniche's failure is its location, which is considered less strategic for living. However, the two developers have spent up to HKD 16.9 billion or equivalent to IDR 32.1 trillion to build the luxurious apartment.

Previously, Logan and KWG believed that their apartment units, ranging from 1,340 square feet to 9,633 square feet, would be a new breakthrough in the property world in Hong Kong, as more wealthy Chinese people would enter the city.

However, the opposite happened and shattered the dreams of the two developers of The Corniche.

The real estate market in Hong Kong has experienced a decline due to political tightening and travel restrictions caused by the Covid-19 pandemic.

In addition, the two developers also faced economic depression due to the pandemic and tightening of bank loans. As a result, the price of one unit in The Corniche suddenly felt very expensive.

Since sales began in January 2023, these three units were sold with prices ranging from HKD 164 million to HKD 185 million or equivalent to IDR 310.9 billion to IDR 250.8 billion.

Now, The Corniche could become the main target for seizure. The bank will have the first opportunity, but other bondholders may have the chance to sell it.

Source: Bloomberg