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Hong Kong property
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Hong Kong’s New World Development to acquire remainder of three Causeway Bay buildings, set stage for more compulsory auctions of old structures

  • The number of compulsory sales applications will rise by as much as 20 per cent in the second half, Knight Frank executive says
  • The three buildings could be worth as much as US$573 million, the largest amount involved in a single compulsory auction at the application stage in history

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One of the three buildings in which NWD plans to acquire the remaining stake that it does not yet own for redevelopment. Photo: Handout
Lam Ka-sing
Hong Kong’s land-hungry developers are acquiring old buildings for redevelopment in the city centre amid limited supply and resilient property prices.
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New World Development (NWD), for instance, plans to acquire the remaining 10 to 20 per cent that it does not own of three buildings in Causeway Bay through compulsory auction, according to Lands Tribunal documents.

“The number of compulsory sales applications will rise by as much as 20 per cent in the second half, due to the alleviation of the pandemic and gradual economic recovery,” said Martin Wong, director and head of research and consultancy for Greater China at Knight Frank. “Developers will be more optimistic about market prospects and will be more likely to submit [such] applications.”

Hong Kong allows the majority owners of buildings that are more than 50 years old and satisfy certain requirements under the Land (Compulsory Sale for Redevelopment) Ordinance to apply to the Lands Tribunal for a compulsory sale order, to facilitate urban renewal. As per the ordinance, developers can force a compulsory auction to buy the remaining stake in a building if they already own 80 per cent of it.

The total number of applications to acquire old buildings for redevelopment could come to between 16 and 20 instances this year, Knight Frank said. As of Tuesday, eight such applications had been made this year, their highest tally since the first half of 2020.

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Companies including Kerryford Holdings and Time Pilot, whose directors include NWD executives, already own between 80.09 and 90.32 per cent of 54-76 Percival Street, 5-27 Lee Garden Road and 60 Russell Street in Causeway Bay.

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