(Yicai Global) May 14 -- Goldin Financial Holdings, a real estate and fine wines investor, is selling a prime piece of land it owns in central Hong Kong at a loss of HKD2.6 billion (USD335.4 million) due to signs of a shrinking economy and growing uncertainties in the property market.

The Hong Kong-based firm is selling the 9,708-square-meter residential plot in the Kai Tak development area in Kowloon district to Top Family Group for HKD7 billion, it said in a statement to the Hong Kong stock exchange on May 11.

Golden Sphere Developments, a wholly owned subsidiary, secured the 50-year lease to the land on the site of the special administrative region’s former airport in 2018 for HKD8.9 billion (USD1.1 billion). Together with the legal, administrative and marketing costs incurred, Goldin’s loss amounts to HKD2.6 billion, it said.

In the face of increasing challenges due to the global economic downturn and the uncertain long-term growth of Hong Kong’s real estate market, the firm’s directors thought it prudent to save on the huge investment needed to develop the land, which was estimated at about HKD14 billion, the statement said.

The proceeds from the sale would be used to pay off some of Goldin’s borrowing so as to improve the firm’s general financial flexibility, it said. The company has about HKD8.8 billion in loans that are due to mature this year. At the end of last year, it held just HKD2.4 billion in cash.

The housing complex to be built on the plot would have a maximum floor area of 53,394 square meters. Goldin planned to start on the foundations in the first quarter of this year and to have completed the first phase by October 2024. But construction has not yet begun, the statement said.

Editor: Kim Taylor