Sino Land's high price for Kowloon Bay site underscores property market revival
Hong Kong's first auction of a commercial site since 2001 attracted frenzied bidding from developers, boosting confidence in the commercial property sector and swelling the government's coffers.
But while most analysts said the auction had sweetened prospects for the property market, they were far less certain about the benefits to the winning bidder, Sino Land.
The vacant 50,752 sq ft site, in an industrial neighbourhood of Kowloon Bay, sold for $1.82 billion. That comfortably exceeded consensus estimates of between $842 million to $1.12 billion, and was nearly three times the official reserve bid of $608 million.
Pang Shiu-kee, managing director of SK Pang Surveyors, said: 'The land auction result shows that the property market revival is not confined to the residential market, but extends to the office market as well.'
It took just over one hour, and 62 escalating bids, for Kerry Properties to concede defeat to Sino Land, which won the right to develop the site into 609,027 sq ft of commercial space. The developer can choose to erect offices, retail facilities, a hotel or all three.
Proprietors of commercial buildings in Kowloon Bay responded to the news by immediately raising their asking prices for office space by an average of 10 per cent, according to Midland Realty.
