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MTR Corp withdraws tender for Oyster Bay residential site on Lantau Island after just 3 bids submitted in subdued market
- It is the third time the bidding process for a parcel of Hong Kong land has fallen through in just over a month
- Developers are hesitant to commit to large investments amid rising interest rates and uncertainty in the economic outlook
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The tender for the first residential project at MTR Corp’s Oyster Bay station in northern Lantau Island has been withdrawn, the third time the bidding process for a parcel of Hong Kong land has fallen through in just over a month.
“The corporation has decided not to accept any of the tender submissions,” said a MTR Corp statement on Monday. “The corporation will retender the project in due course.”
The Oyster Bay project received just three bids on Wednesday, the lowest for an MTR project in nine years. The response was in stark contrast to the first of the rail company’s developments in Lohas Park and Wong Chuk Hang station, which fetched 11 and 14 tenders in 2005 and 2017 respectively.
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The market is still very conservative even as the reopening of the border with mainland China may herald an uptick in demand for Hong Kong property, according to analysts. Developers remain hesitant to commit to large investments amid rising interest rates and uncertainty in the economic outlook.
“The borrowing cost has gone up more than triple,” said Hannah Jeong, head of valuation and advisory services at Colliers. “If the asset is not generating income, it is very hard to get loans, therefore it’s even harder to get financing for construction sites.”
The withdrawal of the tender might be down to the size of the plot and the investment sum required, said Vincent Cheung, managing director of Vincorn Consulting and Appraisal.
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