15 express interest in Tai Wai site
Fifteen developers submitted expressions of interest yesterday in tendering for the MTR's proposed HK$15 billion Tai Wai Station commercial and residential project.
But although the project appeared to have won an overwhelming endorsement, property analysts expressed concern that the eventual tenders from developers would see a repeat of what happened in January when a Tsuen Wan project was withdrawn by the MTR after it judged that the offers submitted by the developers were too low.
Developers lining up to submit tenders for developing the Tai Wai Station site include Cheung Kong, Henderson Land, Sun Hung Kai Properties, New World Development, The Wharf, K Wah International, Kerry Properties, China Overseas Holdings, Wing Tai Properties, Kowloon Development, Nan Fung Development, and Sino Land.
Surveyors expect the site to sell for between HK$10.9 billion and HK$15 billion - or between HK$4,000 and HK$5,000 per square foot of permitted gross floor area. Once construction costs and interest on bank loans are factored in, total investment in the site could reach HK$29 billion.
Vincent Cheung Kiu-cho, national director for greater China at Cushman and Wakefield, said: 'It is a big project and it will involve a large investment cost. I think it might attract three or four bids when it finally goes up for tender. Earlier this year, the MTR Corp's HK$10 billion Tsuen Wan Bayside site attracted 17 developers to submit expressions of interest. However, only four bids were eventually submitted.
'The land price of the Tai Wai Station project is even higher, and I wonder how many developers will be willing to invest so much money on one project. Also, it is not easy to raise more than HK$10 billion in the capital market given the current poor market sentiment and uncertainty about the global economy.'
The site, which is next to Cheung Kong's Festival City development, could accommodate eight blocks of flats 40 to 52 storeys high, with a total gross floor area of about 2.88 million square feet, and a commercial area of about 66,700 square feet.
Cheung said the site could be worth around HK$13 billion, or HK$4,780 per square foot, 'but the size of the project is too big and developers may submit lower offers'.
Since the MTR was unlikely to settle for bids of around HK$3,000 per square foot, there was a likelihood that the project would be withdrawn, he said.
It would have been better to have split the site into four lots, Cheung said. The cost of each would then have been cut to between HK$2 billion and HK$3 billion, which would be more affordable for small developers, he said.
Number of bids the HK$10 billion Tsuen Wan Bayside site attracted, despite 17 expressions of initial interest