Wheelock Properties

Land rush persists despite dim view

PUBLISHED : Saturday, 10 February, 2007, 12:00am
UPDATED : Saturday, 10 February, 2007, 12:00am

Wheelock's HK$1b bid triggers Tai Po site auction while 15 key players line up for Tai Kok Tsui project

Despite a leading developer yesterday commenting that the city's property market was merely 'chugging along', his key Hong Kong rivals continued to show keen desire for more land, triggering an auction and in large numbers expressing interest in a seemingly unexciting project.

Wheelock Properties, a unit of conglomerate Wheelock and Co, yesterday triggered a third Tai Po development site for sale. Also yesterday, 15 developers including most of the leading ones submitted expression of interest for the Urban Renewal Authority's (URA) HK$900 million project in Tai Kok Tsui.

The Lands Department announced that it accepted Wheelock Properties' minimum bid of HK$1 billion, or HK$2,895 per square foot, for a mixed residential and commercial site in Pak Shek Kok, next to the Science Park.

The 107,941 square foot site will be offered for sale on March 13, along with the two other plots in Tai Po triggered earlier by K Wah International.

The site - for which the government has imposed a 36 metres building height limit - could be built up into a maximum gross floor area of 345,406 square feet.

Surveyor Albert So Chun-hin expects many big developers will be interested as the site has potential for luxury waterfront housing.

He estimated that the site could fetch HK$1.4 billion or HK$4,000 per square foot from a developer, who could then charge about HK$7,000 per square foot after completion.

Meanwhile, 15 developers, including Sun Hung Kai Properties, Cheung Kong (Holdings), Sino Land, Henderson Land, K Wah International and Wheelock, submitted expressions of interest for the URA's 23,570 square foot redevelopment site at the junction of Larch and Fir streets. It could provide a maximum gross floor area of 212,160 square feet.

Knight Frank Hong Kong director Tony Wan estimates the site is worth HK$530 million or HK$2,500 per square foot. Property prices for new projects with similar development scale range from HK$3,360 to HK$3,700 per square foot, according to Ricacorp Properties.

Despite the interest shown by the large players, Mr So said the development scale of the site was most suitable for small or mid-tier developers.

Even as his rivals were pushing for more land in Hong Kong, Ronnie Chan Chichung, chairman of Hang Lung Properties, said in an interview with Bloomberg yesterday that Hong Kong's home sales were 'just chugging along'.

'I don't think the market is strong right now,' he said, explaining why his company would hold off resuming sales at three projects.

The third-largest developer by market value, Hang Lung has not made any large land purchases in Hong Kong since 2000, instead focusing on the mainland.

Unnerved by Mr Chan's utterances, investors sold down property shares yesterday. Of the top 20 worst-performing stocks in terms of absolute value, five were property companies.