Hong Kong land parcels worth over HK$30bn set for government tender in February

Hong Kong developer New World Development has won a government land site in Cheung Sha Wan after paying a higher-than-expected HK$7.794 billion.

This is one of four parcels of land up for tender in February, the largest number of land plots for sale in a single month in the current financial year that ends March 31.

The four sites, three designated for residential use and the Cheung Sha Wan plot for business purposes, are together estimated to be worth more than HK$30 billion.

The Hong Kong Lands Department said on Wednesday that the tender for the 83,184 square foot site on King Lam Street in Cheung Sha Wan was awarded to Super Record, a unit of New World Development.

When completed, the commercial site will feature a maximum gross floor area of 998,210 square feet

The price is higher than analyst forecasts, which ranged from HK$4.9 billion to HK$7.5 billion.

Competing bidders for the site included Cheung Kong Property, Sun Hong Kai Properties , Wheelock Properties and China Overseas Land & Investment.

Adrian Cheng Chi-kong, executive vice-chairman and joint general manager of New World Development, said the company was positive about the commercial development in the area.

“This is the largest commercial land in Kowloon West in recent years. Similar supply is extremely rare in the region and even across Hong Kong,” said Cheng.

Analysts said three more sites are to be tendered for sale this month.

“With two months left in this financial year [ended March 31] the government intends to speed up land sales to meet demand,” said Vincent Cheung Kiu-cho, executive director of valuation and advisory services for Asia at Colliers International.

Despite the greater supply, he said land prices would be unlikely to ease.

“It will not be surprising to see record land deals one after another in upcoming tenders as these plots are located in urban areas. Bidding will be fierce,” he said.

Cheung said the frequent land sales would not exhaust developers’ capital as most of them, particularly mainland Chinese firms, have strong financial ability.

The tender sale for a large residential site in Ap Lei Chau, the second land sale by government tender this month, will close on Friday.

James Cheung, a director at Centaline Surveyors, forecast the lot could be worth HK$11.4 billion, or HK$15,000 per sq ft.

Located at Lee Nam Road, the 126,595 sq ft site is next to major housing estate South Horizons.

“The waterfront site will be suitable for a luxury residential project. The site value will also be boosted by the opening of the new South Island Line which will improve the accessibility of Ap Lei Chau,” he said.

There was an increase in buyer and tenant interest in the area after the HK$16.5 billion MTR line opened in December last year, running from South Horizons in Ap Lei Chau to Admiralty via new stations at Lei Tung, Wong Chuk Hang and Ocean Park, according to agents.

The site in Ap Lei Chau, which could yield a total gross floor area of 762,091 sq ft, would accommodate 1,400 units of 540 sq ft in size.

Meanwhile, the tender for the Urban Renewal Authority’s redevelopment project on Peel Street near Soho, Central will close on February 20.

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

Last month, the tender attracted a record 43 developers that expressed an interest in the commercial and residential project.

In addition, MTR Corp’s tender for land atop the Wong Chuk Hang station will close on February 27.

The site, which could potentially accommodate 800 flats totalling 576,950 square feet, is valued at HK$8 billion to HK$9.8 billion, or HK$14,000 to HK$17,000 per square foot.

The phase one of the development comprises two towers and has a target completion date of 2022.

Cheung of Colliers said this residential site would definitely attract tremendous interest among developers.

“It is the first in 20 years for a site atop an MTR station since the last one in Heng Fa Chuen that was offered for tender by the rail operator,” he said.