Three sites at Kai Tak airport site surprise by selling for HK$9.7b

PUBLISHED : Wednesday, 26 February, 2014, 1:13am
UPDATED : Wednesday, 26 February, 2014, 5:19am

The government has sold three residential sites in Kai Tak for a high-than-expected total of HK$9.77 billion, with the biggest site sold to a Hong Kong-listed mainland developer.

A unit of mainland-backed Poly Property beat heavyweights such as Cheung Kong (Holdings) and Henderson Land Development to win the biggest site, with better views, for HK$3.92 billion or HK$6,530 per square foot. The site can provide a maximum floor area of 600,836 square feet.

A subsidiary of K Wah International won another site, providing a floor area of 551,343 sq ft, for HK$2.94 billion or HK$5,300 per square foot. The last piece of land, providing a floor area of 519,794 sq ft, was awarded to unlisted K&K Property for HK$2.91 billion, or HK$5,600 per square foot, the Lands Department said.

The land sales, seen as a barometer of long-term housing market confidence, received a total of 28 bids when the tender closed on Friday.

The biggest site attracted the best response, with 12 bids. The other two sites received seven and nine bids each. Surveyors had predicted the total valuations of the sites would range from HK$7.52 billion to HK$9.53 billion, or HK$4,500 to HK$5,700 per square foot.

James Cheung, executive director of Centaline Property's surveying unit, said the result was better than expected, reflecting developers' greater confidence in the outlook for home prices in urban areas.

Two New Territories sites in Tuen Mun sold well below their appraisal prices early this month, clouding an already poor home price outlook, Jefferies said.

Surveyors said the three Kai Tak sites were attractive partly because of the absence of "Hong Kong property for Hong Kong people" land sales conditions, referring to flats that can only be sold to permanent residents. China Overseas & Investment last year acquired two Kai Tak sites with the conditions attached for HK$4.54 billion, or HK$5,157 per square foot.

The land sales are part of the government's policy to regulate the housing market through an increase in supply.

The combined parcels of land could yield a total gross floor area of more than 1.67 million sq ft. That would be enough to support a housing estate with at least 2,590 flats.