URA gets bids for Kwun Tong project which could net HK$18b investment
Four of the 10 developers invited to tender by the Urban Renewal Authority (URA) have submitted bids for its Kwun Tong redevelopment project, which could see an estimated investment of HK$18 billion.
The bidders for the URA's biggest project include Sun Hung Kai Properties, Henderson Land Development, Wheelock Properties and an unknown party.
"The response is fine given the huge investment involvement. Such a big project will likely only attract bids from big developers," said Alvin Lam, a director at Midland Surveyors.
The URA said it would award the project to the developer who offers the highest profit-sharing proposal, and the winning bidder must also pay a minimum HK$8 billion to the authority. Lam said he expected the entry price to increase to HK$10 billion once the profit-sharing with the URA was taken into account.
Together with an estimated HK$8 billion construction cost, the total investment could be as high as HK$18 billion.
"The higher the cost will increase the investment risk, owing to the fact the residential market is still impacted by the government's cooling measures to rein in home prices," he said.
The Kwun Tong redevelopment is the largest project undertaken by the URA, covering an area of more than 5.35 hectares. The authority awarded the first phase of the project in 2009 to Sino Land, which developed the Park Metropolitan estate.
The 234,160 sq ft site located at Yue Man Square and Hong Ning Road could yield a total gross floor area of 1.65 million sq ft, and could become a residential project with 1,700 flats. It has a non-residential floor area of 357,580 sq ft for retail shops, a two-level public transport interchange for buses, a hawker bazaar and a refuse collecting point.
The URA will buy back the retail portion for HK$1.8 billion when the project is completed.
Following the expression of interest exercise, a review panel under the URA board invited 10 interested property developers to tender bids after considering their experience and financial strength to undertake the development in accordance with its requirements.