Hong Kong land sale could fetch US$294 million for Kennedy Town plot expected to yield 450 flats
- The first government tender of the financial year started on Friday for a plot of land in an area popular with expats
- Surveyors expect between five and 15 bids from developers, who may bid conservatively amid high interest rates and sluggish home sales
A plot of land on Hong Kong Island that is expected to yield about 450 flats – some with a sea view – could fetch HK$2.3 billion (US$294 million) as the first government tender process of this financial year gets under way.
The tender for the land, at the junction of Sai Ning Street and Victoria Road in Kennedy Town, started on Friday, according to the Lands Department.
The plot should attract around five bidders and “conservative” bids of HK$2.2 billion (US$281.5 million) to HK$2.3 billion, or HK$9,000 to HK$9,500 per square foot, said Cyrus Fong, head of valuation and advisory at Knight Frank.
A nearby parcel sold in November for around HK$9,500 per square foot, according to Centaline Surveyors.
“It will appeal to both end users and investors,” said Alex Leung, senior director at CHFT Advisory and Appraisal, who expects 12 to 15 bids. “Expats will like this area as it is close to Central and well-served by MTR, tram and road networks.”
The key selling point is the plot’s relatively large scale on Hong Kong Island, and the fact that some flats will enjoy a sea view, Leung added.
Kennedy Town and the general western area is a popular area for younger, unmarried expats, said Fong. “They are definitely one batch of the potential tenants after completion of the residential development, as small to medium flat sizes are expected” he said.
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However, developers may take a wait-and-see attitude towards the first tender in this financial year,” Fong said, adding that a nearby public mortuary will also be a factor that developers consider, as some people would not like to live near such a facility.
“Potential developers will be concerned about the location, and the sales market, as most likely the developer will sell the residential apartments after completion,” Fong said.
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