Southern Lantau Island hot property thanks to Hong Kong-Macau-Zhuhai Bridge
Plots coming up for sale well suited to mainland and local buyers looking for second homes, says one industry insider
A plot of land on southern Lantau Island measuring 62,108 sq ft, which will become available over the next three months for sale through government tender, could emerge as the island’s newest luxury villa development since the launch of Swire Properties’ Whitesands villas three years ago.
The plot, a 20 minute bus ride along the quiet South Lantau Road from Tung Chung, is located across from Whitesands. The area is currently frequented by hikers and water sports enthusiasts on weekends, drawn to the beaches nearby, but accessibility is expected to improve with the opening of the Hong Kong-Macau-Zhuhai Bridge.
“With new infrastructure, there will be new potential for development on Lantau Island,” said Daniel Shih, head of research at commercial real estate agency Colliers International Hong Kong.
The HK$119.4 billion (US$15.2 billion) bridge will halve the journey time from Hong Kong’s airport to Zhuhai on the mainland to 75 minutes. The new plot of land will benefit from the bridge, which lands in Tung Chung.
Next to YWCA Sydney Leong Holiday Resort, it is the first piece of land along South Lantau Road, Cheung Sha in southern Lantau Island on become available since last August. And Swire Properties did not rule out the possibility of bidding for it.
“We’re interested in expanding our land bank to grow both our businesses in Hong Kong. We will study the terms of the tender when they become available,” a spokesman said. Swire Properties won another piece of land in Cheung Sha in 2013, before launching the luxury Whitesands development, which comprises 28 villas.
The plot, a triangular piece of land in Cheung Sha, is one of five that will be released for tender in the July to September quarter, Michael Wong Wai-lun, the secretary for development, said on July 3.
The site, smaller than a standard football pitch in size, could yield a total gross floor area of 25,000 sq ft, according to real estate consultancy Knight Frank. It said it expected 12 three-storey houses, each with an area of more than 2,000 sq ft, with the top level enjoying a sea view, to be built on the plot.
The consultancy said the land could fetch HK$300 million to HK$330 million – or HK$12,000 to HK$13,000 per square foot of gross floor area. The estimated valuation per square foot is 57 per cent lower than the price of a plot nearby that was sold to the Chan family, the controlling shareholder of Agile Group Holdings, for HK$210 million, or HK$19,667 per square foot, in August 2017.
The current prices for the villas at Whitesands stand at HK$17,000 to HK$23,000 per square foot, according to the Sales of First-hand Residential Properties Authority. Compared with similar listings in other parts of Hong Kong, the prices of homes on southern Lantau Island are 74 per cent lower, according to Spacious.hk.
“The land may attract [local] mid to small sized developers looking for plots suitable for upscale development,” said Louis Ho, a senior sales director at Centaline Property Agency, citing Sino Land, Swire Group and Sino-Ocean Group, which have bought land nearby, as examples.
Thomas Lam, senior director at Knight Frank, said the land will be attractive if the development cost is not “huge”.
“Such developments are good for mainland Chinese buyers, or local rich families, as a second home,” said Lam. He said the shortened travel time from China to Lantau Island was another incentive, especially for mainland Chinese buyers.
In July, 2015, a 5,573 sq ft home in Sino Land’s Botanica Bay development sold for HK$209.4 million, or HK$37,575 per square foot, a record for the island. Sino Land bought the site for HK$428 million in 2007.
Sino Land and the Chan family, who have won two separate pieces of land in Cheung Sha in recent years, declined to comment on whether they would be interested in the new plot. The mainland-based developer, Sino-Ocean Group, could not be reached for comment.
Two more pieces of land, only a five-minute walk from the beach, will go up for sale in Cheung Sha in the financial year ending March, 2019.
The larger one, which is located right next to the Lantau South Divisional Police Headquarters, is expected to fetch HK$930 million to HK$1.12 billion, and could yield 93,000 sq ft of gross floor area in total. At HK$10,000 to HK$12,000 per square foot of gross floor area, it could accommodate about 44 houses.
The smaller piece of land, located by the sea and next to land owned by the Chan family and the Swire Group, is expected to fetch HK$140 million to HK$160 million, or HK$12,000 to HK$13,000 per square foot of gross floor area. With a yield of 12,000 sq ft in gross floor area, it could accommodate six houses.