Mainland developer Agile Group won a residential plot on Hong Kong’s Lantau Island for HK$1.13 billion ($143.96 million) this week, surpassing analyst forecasts for the price of the project by as much as 50 percent amid optimism for China’s “Greater Bay Area” development scheme.
Huge Choice Group, an affiliate of the Guangzhou-based developer shouldered aside eight other bidders including K Wah International Holdings, Sino Land Company Limited and Emperor International Holdings to win the 20,600 square meter (221,736 square foot) site at South Lantau Road, Cheung Sha, Lantau Island.
The winning bid for the site on Hong Kong’s largest outlying island was revealed in an announcement by the city’s Lands Department and works out to a price of HK$12,740 per square foot of accommodation area.
Guangzhou Developer Buys Greater Bay Site
“The winning price is a bit higher than my expectation,” Knight Frank executive director Thomas Lam, told Mingtiandi. “But, Agile is a mainland developer and I believe that they bought the site because they have confidence in Lantau and the Greater Bay Area’s property market.”
The site, identified as Lot No 738 in Demarcation District, is designated for development of up to 8,239 square metres (88,694 square feet) of private homes by gross floor area. The project is expected to feature up to 45 low-rise town houses or semi-detached houses, fetching HK$25,000 per square foot, Lam said. The veteran consultant also expects that potential buyers of homes at the development could come from the mainland, rather than from among Hong Kong locals.
Surveyors had previously estimated the value of the site at as low as HK$740 million, or HK$8,000 per square foot, amid a cooling appetite for risk in the city.
James Cheung, a senior associate director at Centaline Surveyors, told the local media that the parcel benefits from a location on higher ground, enjoys where it provides a broad view of scenery with some units potentially overlooking the sea. The scale of the site also provide great potential for the development of detached houses.
Last December, Sino Land also won a 2,692 square meter residential parcel in the same area for HK$203 million, or HK$17,604 per square foot, nearly 80 percent more than the market forecast.
Lantau Grows Closer to the Mainland
Cheung added that thanks to the completion of a number of infrastructure projects and the growth of the Greater Bay Area, the Hong Kong government has also been actively facilitating the development of Lantau Island.
“My view is Lantau north with the airport, transportation network, commercial facilities and population will be first to benefit from the Greater Bay development,” said Lam. Agile’s newly acquired plot, however, is located in southern Lantau, where infrastructure is not as well developed. Lam said it may take 10 to 15 years to develop the area, subject to government planning.
Lantau is Hong Kong’s largest outlying island and is located at the mouth of the Pearl River where it emerges from Guangdong province. Originally the site of fishing villages, the island has been developed in recent years through the construction of Tung Chung New Town on its northwestern coast and the presence of Hong Kong International Airport on Lantau.
The launch of the 55-kilometer Hong Kong-Macau-Zhuhai Bridge last October brought Lantau closer to Guangdong’s Zhuhai and the gambling enclave of Macau, across the Pearl River Estuary helping to pull together the mainland government’s Greater Bay Area vision for merging the major cities of southern China with the help of improved infrastructure.
The Greater Bay Area is Chinese president Xi Jinping’s grand ambition to integrate nine Guangdong cities with Hong Kong and Macau into a financial and economic powerhouse to rival Silicon Valley or the Tokyo Bay Area.