Hong Kong property

CK Asset plans to convert hotel site into Hong Kong’s biggest housing estate of the last decade, with up to 50 flats on every floor

  • The flagship company of retired tycoon Li Ka-shing wants to turn its Harbour Plaza Resort City hotel into 5,000 flats
  • The project would become Hong Kong’s densest residential estate, with up to 50 units per floor, prompting criticism from analysts
PUBLISHED : Wednesday, 09 January, 2019, 7:04am
UPDATED : Thursday, 10 January, 2019, 11:22am

A hotel in the New Territories will be converted into what may be the biggest private housing estate to be built in Hong Kong in the last decade, under plans submitted by CK Asset Holdings, the flagship company of retired tycoon Li Ka-shing.

The conglomerate has submitted an application to redevelop its 1,100-room Harbour Plaza Resort City hotel in Tin Shui Wai into a dense housing estate comprising 5,000 flats, according to a document filed with the town planning board.

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“It will be a single private housing estate by one developer with the largest number of units in the past 10 years,” said Vincent Cheung, a veteran surveyor. “There’s a good chance it will get approved as it could help increase the housing supply in the short run.”

The proposal is to turn the existing 19-year-old Harbour Plaza Resort City into two 53-storey residential towers yielding gross floor areas of up to 185,817 square meters (2,000,117 square feet). The 5,000 flats would be spread across 47 floors in each converted building.

Market observers say the timing is good because the government recently said it had missed its 2018/2019 land supply target of providing 18,000 private units by almost a quarter.

The city’s second largest builder by market capitalisation, now run by Li’s son Victor, said in the application that the development is “totally in line with the government’s latest policies to increase housing land supply.”

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The proposed redevelopment would be CK Asset’s second project in Tin Shui Wai after its massive Kingswood Villas, which has 15,800 units. The group spent nearly 10 years completing the 58-block project where the latest transaction price has dropped below HK$10,000 per square foot, according to data from local agency Centaline Property.

“It is just too exaggerated. Unfortunately, our developers only look at the profit margin. Of course, the more homes the developer subdivides from the existing hotel rooms, the more they can get,” said Alvin Cheung Chi-wai, associate director at Prudential Brokerage.

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Derek Chan, head of research at Ricacorp Properties, said Hong Kong had not seen such crowded buildings since the public housing estates of half a century ago.

“It would be a problem for the dwellers to come in and out,” he added.

Under the proposal, gross floor area of up to 139,500 square metres will be allocated to residential development, yielding an average size of about 300 square feet per unit.

Although that is 50 per cent larger than the so-called nano flats, until recently all-the-rage in Hong Kong, it suggests the city’s developers are still focusing their efforts on building relatively small flats.

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“Obviously, that is still the easiest money to make as more buyers can afford it, and developers will not give it up,” said Hannah Jeong, head of valuation and advisory at Colliers International.

Market observers said the reconstruction cost would be around HK$4,500 per square foot, and the homes could be sold for HK$9,000 to HK$14,000 per square foot upon completion in three to five years’ time.

Flats ranging in size from 400 to 600 square feet topped the charts last year, after 5,891 of them changed hands, according to Midland Realty.

Units smaller than 400 square feet ranked as the second most sought after, accounting for about a third of all new flats sold in 2018.

Hong Kong’s famously expensive property market has taken a turn for the worse since August 2018, with demand subdued by rising interest rates, a slump in the stock market and uncertainty caused by the US-China trade war.