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Kenneth Ko

The West Kowloon Reclamation is fast developing as a residential area, with a large number of flats under construction or in planning.

While the Government has sold land for residential development, private developers and landlords of older industrial properties adjacent to the reclaimed area are also lookig at redevelopment opportunities.

Chesterton Petty predicts the next five years should see about 23,000 private housing units built -  based on existing plans and projects.

But the actual supply was likely to be higher as more government sites could be converted for private development, it said.

'Some land sites originally planned for Home Ownership Scheme (HOS) developments may be rezoned for private residential use since the Government is planning to reduce the number of future HOS projects,' Chesterton Petty said.

As well, many landlords with industrial sites and buildings in West Kowloon were planning to convert these to residential use - taking advantage of the nearby airport railway and the coming West Rail.

Sun Hung Kai Properties (SHKP), Kerry Properties and China Resources are teaming up to create a housing development on the Kerry Hung Kai Godown and the Yuen Fat Wharf & Godown, in Cheung Sha Wan.

It is expected to provide about 2,900 units.

SHKP also is in a joint venture with Shun Tak Holdings to redevelop its Cheung Sha Wan shipyards for residential use. Indications are this may provide 2,468 units.

It is next to a similar project, undertaken by a consortium led by Cheung Kong (Holdings), comprising 2,500 units.

With the enormous projected supply, Chesterton Petty expects home prices in the area to come under tremendous pressure, and the sales performance to lag behind the overall market.

Residential sites are concentrated in the southern and eastern portions of the area. The supply is composed primarily of the different phases surrounding the airport railway's Olympic and Kowloon stations, as well as government lots auctioned or tendered.

The consultant said sales activity in the area involved only new developments. These included The Waterfront phase-one development at Kowloon Station; plus Island Harbourview and Park Avenue at Olympic Station.

Due to the soft market, these projects had to adopt the same discounting strategies as in other areas to attract buyers, it said.

Analysts consider the large supply will continue to put pressure on prices, but the rapid development in both residential and commercial activities will boost the attractiveness of the reclaimed land.

Last week, SHKP won the right to undertake the HK$20 billion project for phases five, six and seven at Kowloon Station. This will provide 5.4 million square feet of offices, hotels, shops, serviced apartments and flats.

The project includes a 102-storey, 580-metre office tower -  set to be one of the world's tallest buildings.

Analysts said the development would increase business activity and turn the area into a commercial hub. The Government also is planning to locate cultural facilities there, including an opera house on the reclaimed waterfront.

Residential accommodation will receive a boost. A consortium led by Wharf (Holdings) and Wheelock & Co is building more than 2,000 flats in phase two of Kowloon Station; SHKP is developing 1,020 units in phase three; and Amoy Properties is constructing 1,188 units in phase four.

SHKP also is undertaking the phase-three development at Olympic Station, comprising 1,508 units.

A joint venture between SHKP and Cheung Kong is building 1,600 units on a site next to their shipyard redevelopments. They bought the site at auction last April for HK$1.9 billion.

The Government has another three residential sites in West Kowloon Reclamation for sale this financial year.

One of these, a 153,900 sq ft site scheduled for auction in December, could be withdrawn due to technical reasons.

The other two sites are both on the application list and will not be put on sale until developers express interest.

The next five years should see about 23,000 private housing units built



Rezoning of sites set to boost supply