28 firms express interest in Central office, hotel and retail development site, but just two believed to be from the mainland

“Site C”, bounded by Graham, Gage and Cochrane Streets planned to provide gross floor area of around 444,520 sq m of office, hotel and retail space

PUBLISHED : Friday, 11 August, 2017, 7:50pm
UPDATED : Friday, 11 August, 2017, 10:22pm

The Urban Renewal Authority (URA) has drawn stronger-than-expected initial response from potential bidders for its office-retail-hotel redevelopment project near Soho in Central Hong Kong, which could be worth more than HK$10 billion (US$1.28 billion).

Twenty-eight developers submitted expressions of interest for the plot, named “Site C”, bounded by Graham, Gage, and Cochrane Streets, when it closed on Friday at noon, but only two of them were from the mainland, according to Chinese media reports.

Thomas Lam, senior director at Knight Frank had earlier expected more than 20 developers from home and the mainland to express interest in the project.

Although details of cooperation and profit-sharing are set by the URA, Lam estimated the project to be worth HK$10 billion, at HK$19,000 to HK$24,000 per square foot.

Logan Property and China Overseas, both listed in Hong Kong, were named in reports as the mainland-based developers believed to have submitted expressions of interest (EOI) in the project.

Other interested home-grown developers included Cheung Kong Property Holdings, Sun Hung Kai Properties and Wheelock Properties.

“The tightening measures will have impact on the attitude of mainland developers, but the magnitude of the impact is yet to be seen from the results of forthcoming government land tenders,” said Charles Chan, head of valuation and professional services at Savills.

But Chan said the low number of mainland-based developers believed to have submitting EOI did not indicate cooler interest in the Hong Kong property market.

The main reason is the subject project isn’t the cup of tea of many mainland developers, who are more interested in commercial projects in prime locations with prominent frontages and large-scale high,end residential developments
Charles Chan, head of valuation and professional services, Savills

“The main reason is the subject project isn’t the cup of tea of many mainland developers, who are more interested in commercial projects in prime locations with prominent frontages and large-scale high,end residential developments,” Chan added.

Chan said that Beijing’s capital tightening measures had cooled the interest of some mainland developers in Hong Kong, and made them more prudent about investing here.

Once complete, Site C is expected to provide a gross floor area of about 444,520 square feet for office, hotel and retail purposes. The site will also provide open space for community use, of not less than 14,100 square feet.

Interested developers were requested to submit their applications, together with the required information to substantiate their development experience and financial capability to undertake the development, in accordance with the requirements and criteria set by the URA.

A tender review panel, under the URA’s board, will shortlist qualified companies and invite them to submit tenders for the development later.

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