China property developer China Evergrande Group has paid HK$4.2 billion ($541 million) for farmland in Hong Kong it will develop into an ultraluxury complex that will be "like the Palace of Versailles."

Sources with knowledge of the company's plans said that China Evergrande would build a 240,000 square foot luxury villa complex - about the size of New York's Grand Central Terminal. The villas will be reserved for China's richest homebuyers.

China Evergrande bought the plot near the Mai Po Wetlands in Hong Kong's New Territories from Henderson Land Development. Vincent Cheung, the managing director of Vincorn Consulting and Appraisal, said the "bold" plan only served to show China Evergrande's positive outlook about the luxury property market.

China Evergrande will build around 268 luxury villas. Each villa will have eight bedrooms, four elevators, a swimming pool and several gardens.

Compared with the average living space of less than 200 square feet for each person in Hong Kong, the size of the village in China Evergrande's project is unprecedented.

The developer is expected to sell the villas for HK$20,000 a square foot. This would put the price tag of the largest villas at about HK$4 billion each. Apart from the villas, the complex will have a massive garden similar to the Palace of Versailles. It will also have spas, theaters and other amenities.

Over the past few months, Hong Kong's luxury residential market has picked up. According to Centaline Property Agency, more than 10 luxury residential transactions over HK$100 million each have been recorded over the past months.

The most expensive on record was a HK$459.4 million purchase of a flat at CK Asset Holding's 21 Borrett Road project. The price equates to a per square price of about HK$136,000 - a record for Asia.