Henderson Land Development bought the remaining stake in a 53-year-old Kowloon apartment block that it did not already own for the reserve price of HK$1.698 billion ($216.6 million) this week, with plans to redevelop the decrepit building into a new residential project, the site’s auctioneer announced.
Henderson, the listed residential and commercial builder that smashed records when it picked up Hong Kong’s most valuable commercial site on Murray Road last month, will demolish the Hoi Hing Building, the existing project located at 35-47 Li Tak Street.
Augustine Wong, Henderson Land’s executive director, said the 238-unit building will be replaced by a new residential project spanning 180,000 square feet (16,722 square metres), with 460 units of 330 square feet each, according to an account in the South China Morning Post. Henderson plans to invest a total of HK$2.6 billion ($333.3 million) in the project including land costs, or HK$14,444 ($1,852) per square foot.
Notorious Apartment Block To Be Torn Down
The nine-story, 20,114 square foot Hoi Hing Building, located in the Tai Kok Sui area of western Kowloon just west of Mongkok, is notorious as the site of a grisly 2013 double murder case. The building is apparently in a state of extreme disrepair, with trashed units and crumbling walls, and is unoccupied except for a handful of residents.
Henderson purchased the remaining stake in the building by public auction under the city’s Land (Compulsory Sales for Redevelopment) Ordinance, which allows developers to force an auction to buy an entire site of which they already own at least 80 percent for the purpose of redevelopment.
Global real estate consultancy JLL auctioned the site. “The property is in close proximity to a number of residential projects such as Harbour Green and the shopping and residential complex Olympian City,” Cynthia Li, Regional Director of Capital Markets at JLL, which auctioned the site.
“Public transportation is conveniently available in the vicinity as it is close to the West Kowloon Highway and the Olympic MTR Station is only a few minutes walk away,” said Li. “The transaction price reflects market demand for such development site in the West Kowloon district.”
Henderson Adds Another Site to Its Land Bank
Picking up old urban buildings for redevelopment is a specialty of Henderson’s, which has a development land bank of around 7.8 million square feet in Hong Kong and 91 million square feet in mainland China as of year-end 2016, according to DBS Group.
A recent presentation from Henderson details 14 urban redevelopment projects in which the company has secured at least 80 percent ownership as of late March 2017. The projects, which include the Hoi Hing Building, have a total site area of 135,733 square feet, and the redevelopment efforts are expected to bring a gross floor area of more than 1.1 million square feet upon completion in 2019 or later.
The company chaired by real estate magnate Lee Shau-kee has developed or co-developed an array of landmark properties including Hong Kong luxury residence 39 Conduit Road, the city’s International Finance Centre and Beijing World Financial Centre. Last month, Henderson purchased the most valuable commercial property in Hong Kong by agreeing to pay HK$23.3 billion ($3 billion) for a car park site on Murray Road at a government land auction. The developer will convert the site – the first commercial parcel to go on sale in Central since 1996 – into a “landmark building” offering mainly office space, to be completed by 2022.