bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

SCMP Reporter

The developer is bullish on the industry and is negotiating the land premium

Cheung Kong (Holdings)  is pressing on with a hotel project in Aberdeen, despite the likelihood of a high  land development premium.

Executive director Grace Woo Chia-ching said yesterday that the company was talking to the government about the land premium  for the 36-storey hotel project.

Ms Woo  is bullish  on the hotel business while some developers have been lured by a bright outlook in the retail and office sectors.

High land premium charges and worries of an oversupply of hotel rooms have prompted some developers to  reconsider plans to convert industrial sites into hotels.

Sun Hung Kai Properties   recently scrapped  a proposed hotel in Cheung Sha Wan, opting for a 24-storey office building instead.

Kerry Properties has abandoned plans for a hotel at Enterprise Square Five in Kowloon Bay  in favour of a shopping arcade.

Nonetheless, Cheung Kong, which paid  $1.93 billion to acquire  Kowloon Hotel in Tsim Sha Tsui  this month,  is   optimistic about the hotel industry.

'We are confident that individual tourists  will prefer upper-end accommodation,' said Ms Woo,  adding the Aberdeen site would be developed into a  four or five-star hotel.

Cheung Kong acquired the site on Heung Yip Road last year for $61 million.  The site, with a plot ratio of 15, can yield a maximum gross floor area of about 324,000 square feet.

In view of the district's proximity to Ocean Park and the proposed fishermen's wharf, landlords of industrial buildings in Wong Chuk Hang  have applied for land-use changes  to allow hotel development.

Earlier this year, Chinachem paid $49.84 million, or $222 per square foot,  to convert an industrial site in Wong Chuk Hang for a hotel development - a land premium  that observers call exceptionally cheap.

Market watchers say the government has increased land premiums  significantly after  highly successful land auctions that put  it in a much stronger bargaining position.

Ms Woo  said the process of negotiating the land premium  had slowed recently.

'We hope the government will speed up the process of negotiating land premiums, but we understand that it is more difficult for government to determine land premiums for hotels as such transactions are rare,' she said.



Aberdeen hotel stays in Cheung Kong plan