Prime Hong Kong office site tipped to fetch up to HK$17 billion
The first grade-A office site in Central to be offered for tender in 20 years may prove the most valuable in this year’s government land sale programme
The first grade-A office site in Central for tender in 20 years is expected to fetch between HK$15 billion and HK$17 billion, making it the most valuable commercial site in the government’s land sale programme this year.
The plot, in Murray Road, is one of six government sites that will be offered for sale by tender in the fourth quarter of the fiscal year ending March 31.
Hong Kong’s government is expected to add 19,460 apartment units to the city’s housing supply for the 2016 fiscal year , surpassing its target by 8 per cent, said the Secretary for Development Paul Chan, during a press briefing on Thursday.
Analysts see the commercial site on Murray Road as being the most eye-catching land sale on the horizon.
Vincent Cheung Kiu-cho, executive director of valuation and advisory services for Asia at Colliers International, estimates the prime office site, currently occupied by a car park, will be the most valuable plot in this year’s land sale programme.
“Local and mainland firms will be out in force to bid for the precious site due to limited new supply in Central. Mainland banks have been keen to set up their headquarters in Central and this site is a perfect location for them,” he said.
He estimates the site, which would have gross floor area of 450,996 square feet, could generate bids of between HK$35,000 to HK$38,000 per sq ft, equivalent to HK$15.8 billion to HK$17 billion.
“But I will not be surprised to see it sell for a shockingly high price considering mainland firm’s ultra-aggressive approach in their land acquisition spree in Hong Kong,” he said.
Analysts sad the site will attract strong interest from the city’s developers given that it is the first commercial development site in Central since 1996.
Thomas Lam, senior director at Knight Frank, said the government could offer other sites in Central in the coming years but this one has the advantage of being located in the heart of Central.
“Due to limited supply in the long run, both Hong Kong and mainland developers will be interested in the bidding,” said Lam.
He said some mainland companies had asked for information about the site and indicated a price of more than HK$30,000 per sq ft. Its size makes it a good site for the headquarters of mainland companies, said Lam.