Hong Kong property

Kai Tak’s commercial land sale shows Chinese developers are taking a break from shopping

PUBLISHED : Friday, 26 May, 2017, 1:17pm
UPDATED : Friday, 26 May, 2017, 1:17pm

Mainland China’s developers appear to be taking a break from their shopping spree for Hong Kong assets, when a government sale of commercial land attracted only two bids from Chinese companies.

The tender for Area 1F Site 2 at the former Kai Tak airport site attracted 12 bids from developers, 10 of which are Hong Kong companies including Cheung Kong Property (Holdings), Chinese Estates Holdings, Wheelock Properties,Henderson Land Development and Nan Fung Development.

Two mainland Chinese developers -- Shimao Property Holding and Chinese Overseas Land & Investment -- submitted separate bids.

The site, which could yield 1.91 million square feet (177,444 square meters) of total gross floor area designated for offices, retail shops and hotels, has been valued at between HK$7,500 per sq ft to HK$12,000 per sq ft, placing the top end of the estimated price at HK$22.9 billion (US$2.9 billion), a record for the area.

This is the third sale of government land this month that had broken the domination by Chinese companies, reversing the previous trend where they had overwhelmed property sales and broken one price record after another.

When MTR Corp., the operator of Hong Kong’s subway system, put a residential site at the Kam Sheung Road station in Yuen Long up for tender on Thursday, China Resources Land was the sole Chinese company to submit a bid.

Scant interest was also on display when the tender process closed for the Murray Road site in Central, the first grade A commercial parcel to go on sale in the heart of Hong Kong’s financial district in two decades.

Only two mainland companies in the form of Shimao and CCL Land submitted bids.

The site was eventually won by Henderson, owned by one of the city’s wealthiest families, who agreed to pay HK$23.28 billion for it, making Murray Road the world’s most expensive land parcel by square footage.