Cheung Kong Holdings

Hutchison Whampoa, one of Hong Kong’s largest listed companies, is controlled by  Cheung Kong Group, a property company. Hutchison's operations span ports, property and hotels, retailing, power generation and telecommunications. It owns Cheung Kong Infrastructure, and  is headed by Li Ka-shing, Asia’s wealthiest man. 

'Big Three' lodge bids for MTR project

PUBLISHED : Wednesday, 26 May, 2010, 12:00am
UPDATED : Wednesday, 26 May, 2010, 12:00am

The stock market slump did not discourage the city's three biggest property players from joining the bidding for the MTR Corp's HK$33 billion Nam Cheong Station project in Sham Shui Po yesterday.

Cheung Kong (Holdings), Sun Hung Kai Property and Henderson Land yesterday all submitted bids for the project despite stock market jitters over the euro zone debt crisis and tensions on the Korean peninsula.

'The response was better than my expectations,' Charles Chan Chiu-kwok, managing director at Savills Valuation and Professional Services, said. 'I was originally worried none of the developers would submit bids as the land premium was expensive and it is restricted to a mass residential development project.'

The Lands Department imposed a land premium levy of HK$13 billion, or HK$6,582 per square foot, for the first phase of the project. That is close to the property prices of nearby new housing estates. Prices at Park Avenue and One Silver Sea range between HK$7,316 and HK$12,423 per sq ft, according to Centaline Property's transaction data.

The winning bidder of the project will have to discuss the land premium amount of the second phase of the project with the government.

'Despite the stock market plunge yesterday, it did not affect the market response to the tender,' Chan said. 'Their forecasts for the property market in two to three years' time will affect their offers.'

He believes the developers would not offer attractive prices for the project as they are cautious about the upside potential in property prices.

The 6.2-hectare waterfront site will accommodate nine seven- to nine-storey low-rise blocks and nine 42- to 46-storey high-rise residential towers, plus a 287,732-square-foot shopping centre. The project will provide 3,300 flats with a total residential floor area of 2.96 million square feet and is due for completion in 2016.

The first phase of the project could provide a total gross floor area of 1.975 million sq ft.

The project attracted 12 developers, who submitted expressions of interest last month. However, surveyors believe only a few developers could afford the investment cost of HK$33 billion.

In 2005, when the KCRC - which later merged with the MTR - was managing the project, Cheung Kong, Sun Hung Kai Properties, Henderson Land and other five developers also showed their interest in the project. But it was withdrawn from the market due to the concerns of green groups that 20 high-rise towers would cause a wall effect.

MTR Corp property director Thomas Ho Hang-kwong yesterday said the response to the tender was satisfactory. As the site is owned by the government and MTR Corp is responsible for management only, the land price for the site would be paid to the government.

The railway operator will put the fourth phase of Lohas Park in Tseung Kwan O up for tender in the coming quarter. The project could provide a shopping mall with a floor area up to 500,000 sq ft and eight residential blocks with about 3,600 units. Cheung Kong has won the development rights for the first, second and third phases of Lohas Park.

Aiming high

The 3,300-flat project is due for completion in 2016

Surveyors believe only a few developers can afford the investment cost of, in HK$: $33b

The government set the land premium for the first phase at: $13b


Send to a friend

To forward this article using your default email client (e.g. Outlook), click here.

Enter multiple addresses separated by commas(,)