The Urban Renewal Authority's "Sneaker Street" commercial and residential project in Mong Kok has received an overwhelming response, with 12 developers putting in tenders.
"I think they were attracted by the high investment value of the retail space in the project," said Vincent Cheung Kiu-cho, national director for Greater China at property consultant Cushman & Wakefield. "It is located in the core retail area of Mong Kok."
Alvin Lam, a director at Midland Surveyors, said: "Another reason is the site is not big. That's why it attracted mid-sized and small developers."
Developers including Cheung Kong, Sun Hung Kai Properties, Sino Land, Henderson Land Development, New World Development, Nan Fung Development, Wheelock Properties, K Wah International, Paliburg Holdings, Emperor Group and Lai Sun Development submitted bids. Eighteen firms had submitted expressions of interest on July 23.
The 26,673 square foot site near the Macpherson Playground is bounded by Sai Yee, Nelson and Fa Yuen streets. It would be suitable for a project with a commercial floor area of 53,346 sq ft and a residential floor area of 186,712 sq ft.
It is expected to supply a total of 290 flats, half of which would be about 500 sq ft.
Sai Yee Street is known as Sneaker Street for its sports shoe shops. Some of the retailers had to move out for the project.
Under the land lease, the URA will own half of the interest in the commercial portion. The space will be kept for letting for the first five years and sold afterwards. The project aims to preserve the local business character of the district. The URA will give several sports retailers who operated shops at the site an option to lease commercial units.
Cheung estimated the value of the site at HK$2.5 billion. The land price for the residential space is HK$7,200 per sq ft, he said, while the retail space is worth HK$43,800 per sq ft.
"The prices of the flats have to reach HK$9,000 to HK$10,000 per sq ft in order to generate a profit for the developer," Cheung said.
"That would be challenging, as the living environment in Mong Kok is not good. The residents have to live with air, light and noise pollution."