'Upbeat' response to site offers

PUBLISHED : Saturday, 25 June, 2011, 12:00am
UPDATED : Saturday, 25 June, 2011, 12:00am


The government has received 14 bids for a hotel site and another commercial property it is selling by tender. Developers said the outcome showed their optimism about the outlook for Hong Kong's hospitality and office markets.

A 7,717 sq ft site for a hotel at 373 Queen's Road East, Wan Chai, attracted eight bids, the Development Bureau said. The bidders include Emperor International, Sino Land, Cheung Kong (Holdings) and Magnificent Estates. The winning bidder will be permitted to put up a hotel with a maximum gross floor area of 115,765 square feet.

Ringo Chan Wing-kwong, a Sino Land executive director, said after submitting bids for both sites that he was upbeat about the future of the hotel industry in Hong Kong.

The commercial site at the junction of Wai Yip Street, Shun Yip Street and Hoi Bun Road, in Kwun Tong, attracted six bids.

The bidders for the 76,240 sq ft site include Cheung Kong, Kerry Properties, K Wah International and Sun Hung Kai Properties. The winning bidder will be permitted to put up an office tower with a maximum gross floor area of 914,889 square feet.

K Wah International deputy general manager Quinly Wan Tsz-mie said the company bid for the site because of its proximity to the planned Kai Tak cruise terminal. She said K Wah was upbeat about the development of the area.

Henderson Land, New World Development, Chinachem Group said they did not bid for either site.

Surveyors estimate the hotel site in Wan Chai will sell for between HK$500 million and HK$810 million. The site in Kwun Tong is estimated to be worth between HK$3 billion and HK$4.2 billion.

Chan Cheung-kit, director at Lanbase Surveyors, said the site in Wan Chai could be turned into a four-star hotel with about 300 hotel rooms.

'It's close to Causeway Bay which is convenient for tourists to go shopping and offers good views and convenient transportation,' he said.

Chan estimated that the site to be worth between HK$600 million and HK$700 million and said each hotel room should be worth HK$2 million.

Magnificent Estates said it planned to build a 400-room, four-star hotel if it wins the tender.

Chan said the Kwun Tong site should be attractive to developers because tenants of the office tower's upper floors would enjoy sea views and advertising billboards could be installed on the roof. He expects the site to sell for around HK$3.7 billion, which translates to HK$4,000 per square foot of gross floor area.

Alnwick Chan Chi-hing, executive director at Knight Frank, said developers were interested in the Kwun Tong site because the price of office space in the area had risen from HK$6,000 per square foot to HK$8,000 per square foot in the last six months. With more office buildings coming on the market in East Kowloon and little new supply on Hong Kong Island, he said Kwun Tong was 'getting more mature' as a commercial area.