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Hong Kong’s government can turn its ‘rotten luck’ on Kai Tak land sales into a windfall for building homes, analysts say
- Commercial sites that failed to sell since January 2019 can generate 4,000 new homes if converted into residential use, Centaline Surveyors says
- Residential plots in Kai Tak can fetch twice as much as commercial plots, a potential boost to city’s stretched budget
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Hong Kong can end a string of “rotten luck” in its recent public land tenders involving the former international airport site in Kai Tak by converting them into residential use to ease the city’s chronic housing shortage, analysts said.
The conversion could help the government reach its annual land-supply targets while boosting its coffers, according to Centaline Surveyors. The idea is overdue as other facilities in the area, such as the Sports Park, are springing up fast, real estate consultancy Knight Frank said.
The government has failed to find buyers in three commercial sites on the east side of Kowloon Bay for various reasons, crimping its revenues and ability to increase public housing. The stretch coincided with anti-government street protests and the coronavirus outbreak that sent the city’s economy into a recession.
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“Selling land needs right timing and the government has had rotten luck in finding buyers for commercial sites in a poor economic climate,” said Leo Cheung, corporate development director of valuations and property management at Prudent Holdings. “The land conversion idea can help support its land-supply targets.”
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Financial Secretary Paul Chan Mo-po broached the idea on May 14, a day after the government withdrew Site 4, Site 5(B) and Site 10 in Area 2A as bids came below its undisclosed reserve price. Four parties including Sun Hung Kai Properties and CK Asset Holdings had expressed interest in the first tender of the new financial year.
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