The Hong Kong developer that beat out several of the city's biggest and wealthiest property groups for a commercial plot at the former runway of the Kai Tak airport in May has had a change of mind after less than a month, saying it will abandon the offer, citing “social contradiction and economic instability”. Goldin Financial Holdings told a telephone conference on Tuesday that it was rescinding its HK$11.1 billion (US$1.42 billion) winning bid for 4C Site 4 at Kai Tak, forfeiting its HK$25 million deposit on the site. The company organised a board meeting discussing the cancellation on Monday at the request of independent non-executive director and pro-establishment lawmaker Abraham Razack . “The decision came after assessing the short to mid-term impact of the trade war and how the social contradiction would affect the hotel and office market outlook,” Razack said on the telephone conference. “We doubt if the company should invest HK$11 billion in Kai Tak where infrastructure has not yet fully developed.” The withdrawal represents the largest strategic U-turn by a major Hong Kong company since US President Donald Trump slapped tariffs on US$200 billion worth of Chinese products and threatened to impose 25 per cent duties on another US$300 billion worth of imports from China this summer. Razack did not say what the company meant by “social contradiction”, but the announcement came as Hong Kong lawmakers were preparing to vote on the city’s contentious bill allowing extradition of criminal suspects to the mainland. On Sunday, more than 1.03 million Hongkongers, according to the organisers, took to the streets to protest against the bill, while the police estimated the size of the protest at 240,000. In response to a question on the protest, Razack said the company had “a positive view” of the extradition bill and said the firm was still confident in Hong Kong. Taking into account the construction and interest expenses, Razack said the total investment in the project would have risen to HK$18 billion, raising investment risk significantly. The decision to abandon the deal was not unanimous as chairman Pan Sutong and one other board member voted against it, while six supported it. But Razack, who was backed by the pro-government camp to head the bills committee on extradition laws, insisted the firm was still confident in Hong Kong as it has invested HK$50 billion in the city’s property market in the past five years. Property analysts expressed amazement at Goldin’s decision, saying the social and trade issues affecting the outlook were well known at the time of the land tender in May. First seafront commercial plot of land on Kai Tak runway sells for record HK$11.1 billion “The market has not changed much from when they made the bid. The trade war and the extradition bill were already there,” said Joseph Tsang, managing director and head of capital markets at JLL. “At the moment it is just one special case, but if we see more of this, it may signal a softened market,” Tsang said. “We do not know about the prices given by other bidders, but I would say Goldin's bid was aggressive.” The property firm beat out major local rivals, including CK Asset Holdings, Sun Hung Kai Properties, Wheelock Properties, Great Eagle Holdings and Sino Land, to win the seafront plot. At HK$12,888 per square foot, the sale set a record as the most expensive commercial site at the city’s former airport. The winner was announced on May 15. “Three executive directors, Zhou Xiaojun, Huang Rui and Hui Wai Man, and three of the independent non-executive directors, Shek Lai Him [Abraham Razack], Tang Yiu Wing and Wong Wai Leung considered the occurrence of recent social contradiction and economic instability would have [a] negative impact on the growth of Hong Kong’s commercial property market,” the company said in a statement. Sigh of relief as second plot on Hong Kong’s Kai Tak runway fetches more than first Pan told the board on Monday that he did not believe recent events would affect the growth of Hong Kong commercial property market in the long-run. “I would submit a personal bid if the government offered the commercial site for tender in future,” Pan said during the telephone conference. “It is a joke if market talk suggests the deal collapsed because of difficulties in arranging loan financing. Construction of the [company’s] other residential sites in Kai Tak and Ho Man Tin would continue.” A tender for the first commercial plot on the former runway was scrapped after the nine bids received failed to meet the government’s minimum price in January, during a correction in the city’s property market. Goldin's shares closed unchanged at HK$2.31 in Hong Kong before the firm announced its withdrawal of the Kai Tak purchase.