Hopewell will build hotel after it agrees to premium

PUBLISHED : Wednesday, 27 June, 2012, 12:00am
UPDATED : Wednesday, 27 June, 2012, 12:00am

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Hopewell Holdings has finally cleared all the major obstacles in the nearly three-decade struggle over its Hopewell Centre II hotel development in Wan Chai, and has accepted the government's land exchange offer by paying a premium of HK$3.73 billion.

After appealing against the land premium demand, Hopewell yesterday announced it had accepted the government's latest proposal, and under a land exchange deal had given up, or 'surrendered', some land to the government, which then gave Hopewell land in Wan Chai.

It said the surrendered land, at or near Ship Street, Kennedy Road and Hau Fung Lane in Wan Chai, had a total site area of about 62,816 square feet. The re-granted land from the government is in the same area and has a total site area of 105,917 sq ft.

'We are pleased to accept the land premium offered by the government and see this as major progress in the development of Hopewell Centre II, one of our new major projects,' said managing director Thomas Wu. He said construction of the hotel would start by the end of this year and should be completed in 2018.

The project, known as Mega Tower before it was scaled down from 93 storeys, has faced bitter opposition. Residents argued that the massive building, approved in 1994, would bring traffic congestion and block views. In response, the developer cut the height to 55 storeys, halving the number of hotel rooms to 1,024.

The project will have a total gross floor area of around 1.09 million sq ft, with about 758,855 sq ft designated for a hotel, 298,160 sq ft for retail and 36,597 sq ft for offices. Hopewell said the total investment cost was estimated at about HK$9 billion, including the land premium and the cost of road improvement and a park.

This latest settlement comes just three weeks after Wharf Holdings won government approval to rent Ocean Terminal for another 21 years with a land premium of HK$7.9 billion, and only days before the inauguration of a new administration that may unveil significant changes to property market policy.

Vincent Cheung Kiu-cho, national director at real estate broker and consultant Cushman & Wakefield, said the land exchange offered Hopewell a more complete site because the re-granted land included some areas that had been owned by the government near the original site that Hopewell held.