Lohas Park phase 13’s massive investment outlay likely to attract bids only from top developers and consortiums

Only around 10 players likely to submit bids for phase 13 development of Lohas Park

Some 2,500 flats are likely to come up in the project, the second-biggest in Hong Kong after New World Development’s Pavilia Farm in Tai Wai

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A general view of Lohas Park in Tseung Kwan O. Photo: Sun Yeung

Published: 11:00am, 28 Oct 2020Updated: 11:00am, 28 Oct 2020

More than half of the companies that had shown an interest in bidding for the last parcel of land in Hong Kong’s largest residential enclave are expected to stay away, as developers weigh the project’s heavy investment outlay against the city’s weak economy.

Industry observers expect only around 10 heavyweight players or consortiums to submit bids for phase 13 development of Lohas Park in Tseung Kwan O when the tender closes on Thursday. The plot, which can yield a total gross floor area of 1.55 million sq ft, can yield up to 2,550 flats.

A record 35 companies had submitted expressions of interest in late September, including Hong Kong majors like Sun Hung Kai Properties, CK Asset, Henderson Land Development, New World Development, Wheelock Properties and Sino Land. Mainland developers eyeing the plot include China Overseas Land & Investment, Country Garden and Longfor Group.

“As the scale of the project is rather large, apart from major developers, there may be bids from consortiums and partnerships between local and mainland developers,” said Alvin Lam, director of Midland Surveyors.

Hong Kong’s property sector has felt the impact from an economy that has contracted for four straight quarters. Sales first took a hit from the anti-government protests followed by the Covid-19 outbreak, which put pressure on housing prices. However, recent uptake of new property projects has shown that buyers are putting aside concerns surrounding the weak local job market and recent lay-offs at Cathay Pacific Airways. Financial Secretary Paul Chan Mo-po even suggested the city’s recession abated last quarter.

“Developers will not be too aggressive in bidding, considering that the pandemic may further affect future economic performance and thus affect purchasing power,” said Thomas Lam, executive director at Knight Frank.