New luxury high-rise condominiums in Waikiki still have sturdy buyer appeal, judging by the response to the latest planned tower that recently began sales in the midst of Hawai'i's generally cooling housing market.

Fifield Cos. reported selling 48 of an initial 100 units for more than $700,000 in its planned 300-unit Allure Waikiki tower on the former site of the Wave Waikiki nightclub during an opening sales event that began about a week ago.

David Jacobson, sales and marketing vice president of Chicago-based Fifield, said the response exceeded his expectations by a little, but he was surprised that 100 or so people visited the sales office a day before it opened June 30.

"We were moving in our files, and they're asking if they can come in and see what we have available," he said. "I was astounded. The market is supposedly so-so as compared to a year or two ago. Well, it could have fooled me."

Jacobson said nearly all buyers are from O'ahu and bought a range of units in the planned 35-story tower where one- to three-bedroom condos are priced from the mid-$700,000s to $1.8 million.

In recent years, buyer demand for Honolulu condo high-rise projects has been overwhelming, with instances of one-day sellouts or hundreds of people lining up in advance to buy units. The response to Allure Waikiki wasn't nearly as frenetic, but still fairly robust.

By contrast, during the state's previous real-estate market contraction, the 425-unit luxury Hawaiki Tower in Kaka'ako was less than half sold by the time it was finished in 1999.

Fifield expects to start construction on its tower around September and complete it by mid-2009.

STRATEGIC SALES

Selling units in phases is a strategy developers use to generate potentially higher returns by raising unit prices in subsequent phases if the market allows. On the downside, phasing involves more risk because the market could weaken during a longer sales period and undermine prices and sales.

Several recent high-rise projects have sold units in phases, including the Moana Pacific twin-tower project on Kapi'olani Boulevard and the luxury Ko'olani project on Queen Street in Kaka'ako.

Others, such as the luxury Kaka'ako tower Hokua and Capitol Place Downtown, released all units for sale at once to quick near-sell-out response.

In Waikiki, Intracorp Hawaii began selling an initial phase of units in The Watermark Waikiki, a 212-unit luxury condo, two years ago and is down to 15 available units after recently releasing 25 units in a final phase.

Kahi Pacarro, senior analyst with Intracorp Hawaii, said phasing sales as market prices rose over the last two years has allowed early buyers to build equity in their units as the tower is built.

"It's been a success," he said. "Sales have been going very well."

Watermark Waikiki is under construction along the Ala Wai Canal about two blocks makai of the Fifield site. The tower is slated for completion next spring. Units range in price from approximately $700,000 to $4.2 million, or $1.2 million on average.

Jacobson of Fifield said the luxury condo market in Waikiki is particularly strong because it's difficult to acquire attractive real estate for building a tower in the densely developed urban resort area.

"There aren't going to be too many more buildings like Allure Waikiki because you don't have the dirt available," he said.

PROJECTS IN WORKS

In addition to Allure Waikiki and the Watermark, Waikiki high-rise projects include one planned for possible residential use and one hotel-condo tower under construction.

The potential residential tower is planned at 2121 Kuhio Ave. on a vacant site once occupied by Hula's Bar & Lei Stand. Developer K3 Owners is contemplating a 220-unit residential condo or time-share, or a hotel condo with 140 hotel units and 120 residential units. A K3 principal said a decision on what to build hasn't been made. Construction is expected to begin around the end of next year at the earliest.

Waikiki's fourth high-rise project, the 38-story Trump International Hotel & Tower Waikiki Beach Walk, broke ground in January after a November one-day sellout of its 464 hotel-condominium units for an average $1.5 million.

The Trump project involving Donald Trump and Irongate Capital is slated for completion in 2009 at Kalia and Saratoga roads.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.