Update | US$3.25 billion Hong Kong land plot sale fails to spark expected level of interest
The land on the site of the former Kai Tak airport had been expected to smash the city’s price record, but drew only five bids
The government tender for what could become the most expensive plot of residential land in Hong Kong’s history has received weaker-than-expected interest from developers, as soaring land prices have forced some players to the sidelines.
Five bids had been submitted for the parcel on the site of Hong Kong’s former airport, known as Kai Tak Area IF, Site 1, next to Kai Tak MTR station, when the tender closed at noon on Friday, according to the The Lands Department.
“The number of bids are lower than my expectation. It may be due to the involvement of large investment sum of this site. Without taking into consideration construction cost, the site itself is already worth more than HK$20 billion,” said Thomas Lam, senior director at Knight Frank.
His earlier projection was for more than 10 developers to participate in the tender.
“Developers are getting cautious,” he said.
Hong Kong land prices have surged to very high levels, plus the government is leaning towards imposing a vacancy tax, which will add to the uncertainties, said Lam.