Land sale in Hong Kong’s trendy SoHo district draws developers in record numbers

Forty-three developers expressed an interest in the Urban Renewal Authority’s commercial and residential project near Hong Kong’s SoHo district on Tuesday, a new record in terms of initial responses for tender.

The 9,580 sq ft plot, on Peel Street, is expected to fetch between HK$1.3 billion and HK$1.5 billion, or HK$13,000 per sq ft to HK$15,000 per sq ft.

“It is the strongest outcome ever generated for a land sale through tender,” said Alvin Lam, a director at Midland Surveyors.

He said it had broken the previous record, set in August 2015, when URA’s Shau Kei Wan project generated 38 expression of interest.

Lam attributed the overwhelming response mainly to the site’s prime location and the relatively small investment amount required.

He expects the project will require an investment cost of about HK$1.8 billion, with the winning developer eventually offering the new flats for HK$20,000 to HK$30,000 per sq ft.

“SoHo district is an entertainment area with trendy bars and restaurants near Central,” he said. “This location will definitely be sought after by end users and investors when the project is due for launch in the future. The downside risk is limited.”

Among those submitting expressions of interest were New World Development; Wheelock; Vanke Property (Overseas); Nan Fung Development, Logan Property Holdings; Wang On Properties; K & K Property; China Overseas Land and Investment, Chinachem Group, and Empire Group Holdings, chaired by Sun Hung Kai Properties’ former chairman Walter Kwok Ping-sheung.

Small to medium-sized developers would be very keen to bid for this site, said Lam.

Currently occupied by an old building, the plot will yield a total gross floor area of close to 100,000 sq ft. It will provide 84,282 sq ft of residential space, or 116 units, and 15,715 sq ft covering a multi-purpose activities hall and commercial spaces.

The winning developer will be required to provide a public open space of not less than 3,229 sq ft for the enjoyment of the general public.

URA said a tender review panel would shortlist the qualified developers, taking into consideration their experience and financial capability to undertake the development in accordance with the requirements and criteria set by the authority.

The project is divided into three sites (A, B and C) and is being implemented in phases, said URA.