Sun Hung Kai Properties, Chinachem Group may bid in rare ‘two-envelope’ tender for prime commercial plot next to Hong Kong’s IFC

Government using ‘two-envelope’ method to sell New Central Harbourfront Site 3, meaning winner will be determined by assessing both price and design proposal

Size of cash bids is likely to be subdued by depressed outlook for city’s office sector after Covid-19 devastated demand, say analysts

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View of New Central Harbourfront Site 3. Photo: Felix Wong.

Published: 10:37pm, 18 Dec 2020Updated: 12:53am, 19 Dec 2020

Hong Kong’s biggest developer by value, Sun Hung Kai Properties, and Chinachem Group said they may bid for a prime plot of commercial land to be sold via a rare tender process that takes into account participants’ design plans as well as cash bids.

The government is using a “two-envelope” approach for the sale of New Central Harbourfront Site 3, meaning the winner will be determined by assessing both price and design proposal. This deviates from the practice of awarding sites based on the highest bid alone, which has been used consistently for the last 18 years.

The 516,000 square-foot parcel is next to the International Finance Centre, and was described by one property agent as the rarest and “most precious” plot to go on sale since the development of that landmark tower.

Of 11 major developers polled by the South China Morning Post, only SHKP and Chinachem – both frequent participants in local land sales – said they were interested in the parcel.

“It is a very important site in Central. The two-envelope system will give us bidders not only price competition, but also [competition in] the design and project layout to show the thoughts and advantages of every competitor,” said Donald Choi, chief executive at Chinachem Group.