Hong Kong waterfront sale to go with mainland tide
Largest land sales have been dominated by players from across the border and latest site sell-off right at the heart of the financial district will be no exception
The mother of all prime sites may soon go on sale. The transaction, however it turns out, is likely to be as political as commercial. Expect a big public controversy to be right at the heart of Central.
The government is planning to sell “Site 3” at the Central Waterfront, the 1.5 million sq ft development that extends from Jardine House and City Hall to the Maritime Museum, encompassing the General Post Office and Star Ferry car park. Some analysts estimate the sale will be in the neighbourhood of HK$75 billion!
Urban planners and architects met recently to address the challenges and opportunities in the expected sale.
Environmentalist and district councillor Paul Zimmerman has warned of potential flaws in the tendering process. Rather than just selling the site to the highest bidder, he has advised the government to include an open competition for the best architectural design that meets public needs.
“The official ‘planning brief’ was produced through a bureaucratic process and is bereft of real urban design requirements,” he said. “We need a competitive design process before the site is handed over to a developer,” Zimmerman said.
It’s sensible advice. But the final sale, if I were to venture a prediction, will not end up with a local developer, but a mainland group with deep pockets.
A local developer or consortium may be more willing to play ball, but given the mega price tag, even the largest local ones will be deterred.
The largest land sales have been dominated by mainland players, who bought HK$38.6 billion of land from the government in the first half of 2017, or 96 per cent of all transactions by value.
That’s compared with 39 per cent of the total in all of 2016, according to Bloomberg data, and less than 6 per cent in 2009. This trend is likely to continue.
More importantly, the symbolic significance of the location makes it all the more tempting for it to become a mainland-owned property.
Right at the heart of the financial district, it will redefine the city’s waterfront and skylines for decades to come. It will also be near the headquarters of the People’s Liberation Army and that of the government.
Given all these potential non-commercial factors, the government may find it hard to impose too many extra sales conditions other than a simple tender.