Hong Kong MTR

Developers keen as MTR's Tai Wai residential project up for tender

Improved market sentiment boosts interest in prime location, with 23 developers responding

PUBLISHED : Tuesday, 16 September, 2014, 3:15am
UPDATED : Tuesday, 16 September, 2014, 3:15am

MTR Corp's Tai Wai Station residential project yesterday received an overwhelming response, with 23 developers expressing interest in the property, compared to the 15 expressions of interest when it was released for the first time two years ago.

"More developers are interested in the project because of the improving market sentiment in recent months," said Vincent Cheung Kiu-cho, national director of Greater China at Cushman & Wakefield.

"Many new residential projects recorded strong sales. It gave developers confidence in land acquisitions," he said.

"The location of the site is very good. And the new land premium levy would be less than that in 2012. But the construction cost of residential [developments] has risen to more than HK$4,000 per square foot. The response of the tender depends on the terms of the tender."

When MTR Corp released the Tai Wai MTR Station residential project for tender two years ago, the winning bidder was required to pay a land premium to the Lands Department of HK$12.7 billion, or HK$4,410 per square foot. They also were required to offer a profit-sharing scheme to the MTR.

This time around, the project has attracted interest from large developers such as Sun Hung Kai Properties, New World Development, Nan Fung Development, Kerry Properties and Wheelock Properties, as well as mainland developer China Vanke.

Mid-sized developers Emperor International, Lai Sun Development, Kowloon Development, CSI Properties and Asia Standard International have also submitted expressions of interest, as did property trust Link Reit. The railway operator will release the project for tender soon.

Surveyors estimated the total investment cost, including land premium, construction and interest, is about HK$20 billion.

The site covers an area of 521,107 square feet and could yield a gross floor area of 2.7 million sq ft. It could provide for 2,900 flats and a shopping centre.

The project was withdrawn from tender in 2012 because the bids were considered to be too low. Only Henderson Land Development, SHKP and Cheung Kong (Holdings) submitted bids at that time.

"It is too early to say if developers have a keen interest in the project because the railway operator has yet to disclose the terms of the tender and land premium amount," said Cheung.