Hong Kong’s new business hub at Kai Tak may fall years late as developers turn skittish
- Government may postpone planned land sales, analysts say
- Knight Frank has lowered its estimate on the value of remaining Kai Tak parcels by 5 per cent to a range of HK$87 billion to HK$98 billion
The bold vision to transform the former Kai Tak airport site into a second major business hub in Kowloon East may have to be put on hold for a while, as confidence in the project has been dealt a blow after a local developer judged it too risky to proceed with the purchase of a HK$11.1 billion (US$1.42 billion) site, according to industry experts.
The government may opt to defer the sale of some commercial sites at the city’s former airport by up to two years until sentiment improves, a delay that would have a domino effect upon the completion cycle for some commercial buildings.
“If the government really is not sure about next year and they defer more, there is a potential they change [the sales schedule], especially on the runway side,” said Hannah Jeong, head of valuation and advisory at Colliers International.
On June 11, Goldin Financial Holdings rescinded its bid for 4C Site 4, forfeiting its HK$25 million deposit, citing “social contradiction and economic instability”.
The failed land sale, along with slower-than-expected development of an underground subway line linking the Kai Tak area, along with planning delays for a monorail system, were seen as dragging down interest for the remaining commercial sites.