Rail schedule delays developments
Postponed Sha Tin-Central link will affect residential sales
A consortium led by Wharf (Holdings) is to postpone work on its residential-hotel-retail development of two million square foot in Kowloon Bay, following a government announcement that construction of the HK$33 billion Sha Tin-Central rail link will be delayed for up to two more years.
Estate agents believe other developers will follow suit in delaying projects because investment potential in areas along the route will largely depend on when work begins on the mass transit railway network.
Secondary residential transactions in these areas are also expected to soften following the announcement.
Last month, Secretary for the Environment, Transport and Works, Sarah Liao Sau-tung, said the government planned to delay work on the rail route for up to two years.
A Kowloon-Canton Railway Corp spokesman said the planned Sha Tin-Central link might have to be realigned between Hunghom and Central West.
Under the proposal, the link will run between Sha Tin, Wan Chai and Central through areas in East Kowloon including Tsz Wan Shan, Diamond Hill, Kai Tak, Ma Tau Wai and Hunghom.
Wharf assistant director Ricky Wong Kwong-yiu said that a joint venture development with Nan Fung Development and Kerry Properties in Kowloon Bay was also being delayed.
The redevelopment of Kowloon Godown, Kerry Godown and an industrial site owned by Nan Fung was originally scheduled for completion by 2007 to 2008, Mr Wong said. The construction schedule has not yet been fixed.
The project will comprise a three-star hotel with about 200 rooms, a 30,000-square foot retail podium, and more than two million square feet of residential space.
Centaline Property Agency senior research and marketing manager Wong Leung-sing said developers would continue to postpone developments in East Kowloon and suspend new residential sales until the new railway alignment was finalised.
The check on residential sales is expected to weaken interest in short-term home purchases in To Kwa Wan and Hunghom.
Mr Wong expected the consortium of Cheung Kong (Holdings), New World Development and Shanghai Industrial Holding to delay residential sales at Sky Towers in To Kwa Wan, scheduled for this year.
Also expected to be delayed is a large-scale residential development by Henderson Land Development and Hong Kong and China Gas Company on the gas works site in Ma Tau Kok.
Last month, the government said the KCRC was considering various options, including extending the existing East Rail link from Hunghom to Central.
A Kowloon-Canton Railway Corp spokesman said the company was considering the feasibility of extending the existing East Rail from Hunghom to Hong Kong Island.
Ms Liao has said the proposed East Rail extension would mean that passengers from Lo Wu would have direct access from the KCR to Central, and not have to change trains.
Nan Fung Development project director Donald Choi said travel between the mainland and Hong Kong would be facilitated if the East Rail connecting Lo Wu could be extended from Kowloon to Hong Kong Island.
'More mainlanders visiting Hong Kong would benefit the economy,' Mr Choi said.
He said that passengers would probably prefer to cross the harbour using the East Rail than by taking the Sha Tin-Central railway link.
