M+ owner plots next chapter for West Kowloon project, buoyed by record winning bid for Hong Kong’s Central Harbourfront site
- Tenders for the Artist Square Towers Project were issued in late November
- This is the best time to launch such a project, West Kowloon Cultural District Authority executive says
“Across the harbour, Central Site 3 was a good insight for us. It turns out … a waterfront, high-quality with ease-of-accessibility project is attractive to developers,” said Wendy Gan Kim-see, the authority’s deputy CEO (District Development).
Hong Kong developer Henderson Land Development last month won a 50-year land grant for Central Site 3 for a record HK$50.8 billion, beating five contenders for the government’s “two-envelope” tender.
The response to the site came after several commercial plots of land in Kai Tak were withdrawn from sale over the past few years because of poor reception.
The West Kowloon concept aims to use stable rental income from commercial projects to support the arts and culture, Gan said. “It is time to focus on this part. We thought market sentiment was suitable. Site 3 had such a good response. So we think it is exactly the best time to launch such a project.”
The successful tenderer will be granted the development and operational rights for 34 years, and will be responsible for the design, construction, financing, marketing, leasing, management and maintenance.
The winner will have to pay the authority a regular rental income, a lump sum to be decided by the tenderer, three and 15 months after winning the bid respectively, Gan said. Tenders will be judged on the amount of such payments, calculated using a formula with the initial consideration decided by the developers.
Moreover, starting from April 2025, the winner will every month separately pay a “guaranteed rent” or share of revenue, whichever is higher, Gan said. By this time, the developer should have finished constructing the three buildings, which should be in operation, she added.
The revenue sharing ratio will be 10 per cent at the beginning, she said. In the 16th year of operation after there is income, the ratio will rise to 20 per cent. Gan’s team believes that 34 years will be enough to let the developer find the project attractive.
Located in the heart of the district, the project comprises three commercial buildings with a gross floor area (GFA) of about 65,000 square metres, about 96 per cent of which will be for offices. The rest will be allocated for retail, dining or entertainment.
The authority has already started foundation work, even before a winner has been chosen.