Developer CK Asset wins Hong Kong’s first plot of land earmarked for private and subsidised starter homes for lowly HK$4.9 billion as Covid-19 batters property market
- The city’s second-biggest developer by value will pay HK$4.95 billion (US$638.8 million) for the site on Kwun Tong’s Anderson Road
- The winning bid is at the low end of surveyors’ valuations as developers hold back amid fears of long-term damage to the market and wider economy amid coronavirus fallout.
CK Asset Holdings has won Hong Kong’s first ever plot of land earmarked for a mixture of private and government-subsidised homes developed by private builders, for a price at the lower end of market expectations.
The second-biggest developer in Hong Kong by value will pay HK$4.95 billion (US$638.8 million) for the site on Kwun Tong’s Anderson Road, the Lands Department said on Tuesday.
The price per square foot translates to HK$4,546, a fraction of the HK$12,003 per sq ft that Chinachem Group paid for another residential parcel on Anderson Road in January 2018.
The price indicates “developers are pessimistic about the prospects of housing market,” said James Cheung, surveyor at Centaline Surveyors.
Market valuations for the plot had ranged from HK$4.6 billion (US$593.4 million) to HK$9 billion, after surveyors trimmed their estimates by up to 20 per cent amid concerns about Hong Kong’s economy and the fallout of the coronavirus pandemic.
Midland Surveyors said the government had probably adjusted the reserve price amid the bleak economic outlook.
The site can yield about 1.09 million square feet, equivalent to one and three quarter football pitches. Total investment in the project could amount to HK$9 billion to HK$10 billion.
At least 1,000 flats will have to be sold as starter homes priced at 80 per cent of their market value. This portion will have to be sold before the project’s private housing section goes on the market.