Wheelock and Co wins seventh phase of Lohas Park development

MTR Corp on Friday awarded phase seven of its Lohas Park development to Wheelock and Co in a deal that allows the developer to more than halve the investment cost.

Taking into account the HK$5 billion construction cost and HK$3.88 billion land premium payable to the Lands Department, analysts said the total investment for the 1.24 million sq ft retail-residential project would be HK$8.88 billion.

But the rail operator said in the announcement that it would pay the developer HK$4.98 billion to buy back the shopping centre when it was completed. After deducting the HK$4.98 billion, Wheelock's investment would be reduced by 55 per cent to HK$3.9 billion.

"The developer's move to give up the shopping mall will shorten its pay-paid period," said Alfred Lau, an analyst at Bocom International. "It will generate cash flow once the residential project is ready for pre-sale."

But it would be a long wait before the shopping mall was up and running, he said.

Lohas Park phase seven will comprise 1,250 flats, or 756,272 sq ft in two residential towers sitting on a 478,998 sq ft shopping centre near MTR's Lohas Park station. The commercial project is expected to be completed by 2020, with the whole project scheduled to be finished by 2022. It will be Wheelock's second site in Lohas Park after it won the phase five residential development in November at the lowest price in 10 years in that area.