Developers KWG Property Holdings and Longfor Properties have become the latest mainland home builders to buy into Hong Kong’s Kai Tak area after a HK$7.3 billion ($938 million) joint bid by the two developers won a residential site in the one-time industrial neighborhood, according to an announcement yesterday by the Hong Kong Lands Department.
The mainland duo bested 15 other bidders, including the mainland’s second-ranking developer by sales, China Vanke, and Hong Kong top-ranked builders including Li Ka-shing’s Cheung Kong Property Holdings, Henderson Land Development, K Wah International and Wheelock Properties to win the rights to the 104,635 square foot (9,721 square metre) inland site.
For KWG, this is the second major Hong Kong land buy of 2017 for the mid-range developer, and the auction marks the fifth time in the last seven months that a mainland builder has won the bidding for a Kai Tak site.
Mainland Duo Paying HK$12,685 Per Sq Ft
KWG and its partner Longfor walk away from the auction having paid the equivalent of HK$12,685 per square foot of condos it is allowed to build at New Kowloon Inland Lot No 6567. As the plot name implies, the new site is well inland from the harbourfront area where China’s HNA Group has recently dominated land sales. The site is approved for construction of up to 575,492 square feet (53,465 square metres) of residential space.
Other mainland bidders for the site included China Resources Land and Logan Property Holdings. The project also attracted bids from Hong Kong’s Kingboard Property Development and Emperor International Holdings, among other contestants for the Kowloon property. The plot is located along the route of the second phase of the Shatin to Central Link Railway, a high speed connection between the New Territories and Central, which is expected to be completed in 2021.
HNA, which had spent a total of HK$27 billion to purchase four Kai Tak sites representing 396,811 square feet (36,865 square metres) of land between November and March, did not bid on this latest Kowloon project.
KWG and Longfor Get to Know Hong Kong
The Kai Tak condo project is KWG’s second Hong Kong joint venture this year after the Guangzhou-based developer teamed with Logan to purchase a residential site on Ap Lei Chau Island for HK$16.86 billion (US$2.17 billion) in February. That joint purchase had set a record high price for a land sale in Hong Kong, which was broken this week by Henderson Land’s HK$23.3 billion purchase of a commercial site in Central.
For Longfor, the Kai Tak project is the first Hong Kong undertaking for the developer run by billionaire Wu Yajun, after the company had said last year that it was looking for opportunities in the Asian financial hub as a way to diversify its portfolio.
In a statement on its website, Beijing-based Longfor characterised the project as part of a new focus on the Greater Pearl River Delta. On the same day that the Kai Tak results were announced, Longfor also won a land auction across the border in Shenzhen, where it agreed to pay RMB 482 million ($70 million) for a 13,840 square metre commercial project.
KWG and Longor are already familiar with each other, have previously worked together on a joint venture project in Beijing.