Hong Kong’s final tender for Kai Tak site for 2016 draws 16 bids

Hong Kong government’s final land tender for the year, at the former airport site of Kai Tak, has attracted 16 bids from local and Chinese developers.

The Kai Tak Area 1K Site 2, close to a plot sold on Monday to HNA Holding Group for a record HK$13,600 per square foot, could fetch between HK$5.74 billion to HK$6.32 billion, valuers said.

On a per-square-foot basis, that will be between HK$10,000 and HK$11,000 per sq ft for the site, which can yield 574,259 sq ft in gross floor area.

The value of Site 2 could be lower than the two previous plots -- 1K Site 3 and 1K Site 1 -- sold to HNA, said Midland Surveyors director Alvin Lam.

“The view from this site will be blocked by other buildings that will eventually be built on Site 3 and Site 1,” Lam said.

New World Development, Cheung Kong Property , K Wah International, Logan Property, Shimao Property Holdings, Sun Hung Kai Properties, Wheelock Properties, Far East Consortium International, Vanke Property (Overseas) and Chinachem Group submitted separate bids for the site before tender closed at noon on Friday.

Sino Land teamed up with China Overseas Land and Investment and SEA Holdings, while

Chevalier International Holdings joined Wang On Property in submitting a bid for the tender.

Among mainland developers, HNA has been the most aggressive, paying a total of HK$14.25 billion for IK Site 3 and the adjacent lot IL Site 3. Combining these two sites would yield a gross floor area of 1.05 million square feet, at an average land cost of HK$13,537 per sq ft.

“Kai Tak’s sites are well sought after because developers are still very keen to acquire land in Hong Kong’s urban centre,” said Vincent Cheung Kiu-cho, executive director of valuation and advisory services for Asia at Colliers International.

Mainland Chinese developers have outbid their competitors in five of the last eight government tenders in the area, driving prices up by 177 per cent since June 2013 to the current record.