Hong Kong developer Chinachem Group has won a tender to develop a residential parcel in the Kwun Tong area of the city’s Kowloon East, shouldering aside 24 other bidders to offer HK$3.1 billion ($397 million).
Other competitors for the site included mainland players China Vanke, China Overseas Land and Investment and Minmetals Land as well as a number of local Hong Kong developers according to an announcement by the city’s Lands Department. The bids were collected last week.
Chinachem Could Invest $650M To Build Apartments
The parcel located off Anderson Road covers about 57,630 square feet (5,354 square metres) and is designated for private residential use, with a gross floor area (GFA) of up to 259,335 square feet (24,093 square metres). Chinachem bought the site for the equivalent of HK$12,003 ($1,535) per square foot of buildable area.
The privately held developer of residential and commercial properties plans to invest HK$4.5 to HK$5 billion ($576 to $640 million) to build the project, which will feature flats of mainly two- and three-bedroom designs, company executive Ng Shun-moi told reporters. Ng added that the rare residential site presents an opportunity for the company given the development and maturation of the Kowloon East area.
The lot is the first residential-use parcel to be auctioned at the Anderson Road Quarry site, which the government is developing to provide about 12 hectares of land for 9,400 private and subsidised homes. The quarry project will also be offered for commercial uses, government, institutional or community facilities, open space and amenity areas. The project, with a planned population of 25,000, is expected to start accommodating residents in 2023-24.
Mainland Developers Take a Breather
The coveted plot attracted a total of 25 bidders, almost double the number of contenders in the last residential land sale in Kowloon Tong the week before. That sale attracted 13 bidders in total for a luxury apartment plot at the junction of Lion Rock Tunnel Road and Lung Cheung Road. Local champion The Wharf scooped up the site for HK$12.4 billion ($1.6 billion), setting a new Kowloon price record in the process.
The recent sales indicate that mainland property firms may be losing interest in Hong Kong sites. Last month, Kerry Properties and Sino Land picked up a residential parcel in the Wong Chuk Hang area for an undisclosed amount, after the site on the south side of Hong Kong Island received just one bid from a mainland contender, China Resources Land.
The same Shenzhen-based developer was also the sole mainland-based bidder for a residential site in Yuen Long in May of last year. China Resources Land teamed up with Hong Kong’s Sino Land and K Wah International to buy the site for HK$8.33 billion ($1 billion).
Mainland developers dominated the city’s market for new residential land for most of 2016 and 2017, including spending over HK$44 billion ($5.6 billion) to purchase all of the residential plots auctioned in Hong Kong during the first half of last year.
Over Two Dozen Bidders Vie for Kwun Tong Parcel
The newly-sold Kwun Tong site attracted three contenders from north of the border. Local Hong Kong bidders for the site include Far East Consortium International, K&K Property, Wheelock and Company, CK Asset, K Wah International, Kerry Properties, Sun Hung Kai Properties, Regal Hotels International, Swank Bay, Glory Field Investment, Chuang’s Consortium International, Grand Ming Group, Henderson Land Development, Chevalier International, New World Development, New Explorer Investments, Billion Real Estate, Sino Land, Emperor International, Kam Wah Properties and a consortium of Wang On Properties and Tai Cheung Holdings.