Henderson pays HK$291m for Kowloon building
Henderson Land Development is continuing to buy older buildings in Hong Kong for redevelopment, purchasing a site in Kowloon for HK$291 million at an auction yesterday.
Henderson Land was the sole bidder of a property at 186-188 Tai Po Road, Kowloon, which houses a five-storey building, according to property consultant Savills, which conducted the auction.
Henderson Land started buying units in the building in 2009 and held 92 per cent ownership since early last year. The Lands Tribunal recently approved the compulsory sales order for the building.
Spanning an area of 8,325 square feet, the property is a commercial-residential development built in 1955.
Last year, the Buildings Department approved Henderson's plan to redevelop it into a 37-storey building. A Henderson Land representative yesterday said the site would be redeveloped into a residential building, with shops on the lower floors. He said the project would provide 9,000 sqft of retail space on two floors.
The building will comprise 80 flats with gross floor area ranging from 500 sqft to 600 sqft. Sales of the flats are expected to begin by the middle of next year.
Henderson Land has stepped up its acquisition of old buildings for redevelopment as a way to increase the company's land bank. Chairman Lee Shau-kee last year said it was easier for the company to buy old buildings since the government in March lowered the threshold for compulsory sales to allow for redevelopment.
The law allows developers to force the sale of remaining flats in a building older than 50 years once they have acquired 80 per cent of the property interests in it.
This is down from the previous 90 per cent threshold.
The lower threshold also applies to two other types of blocks: those with all units but one acquired; and industrial blocks outside industrial zones that are more than 30 years old.
In the middle of last year, Henderson said it had snapped up most of the ownership of 40 sites, which could provide a total gross floor area of eight million sqft and 12,000 flats.
Wrecker's ball swings
From 90 per cent, the threshold for compulsory sale of an old building for redevelopment has been lowered to: 80%