The mainland parent of one of Singapore’s largest real estate developers will soon start work on its first Hong Kong housing project, after CNQC International paid HK$530 million ($67.7 million) for a Kowloon East site.
Hong Kong-listed CNQC International, which operates as the local unit of Qingjian Group, purchased 18 Tung Yuen Street, an aging industrial project in Yau Tong district from Hong Kong steel manufacturer, Shiu Wing Steel late last month.
The purchase by the Qingdao-based company came after the site, which is currently lease out to a cement factory, had already been approved for redevelopment that could yield up to 119,000 square feet (11,000 square metres) of housing as the Hong Kong government continues to convert Kowloon East from a gritty industrial district to a hub of commerce and high-end housing.
Qingjian Joins Hong Kong Development Fray
Qingjian Group’s new Kowloon East site, dubbed “Yau Tong Marine Lot No. 58&59 and the extension thereto” by city planners, covers 23,582 square metres and comes with an existing tenant agreement that will allows the cement factory to keeping renting the site for HK$1 million per month through June 30, 2020.
CNQC International’s chairman, Michael Cheng, had already expressed the company’s interest in taking on development projects some three months ago. Reports in August cited the representative of the group, which also controls top ten Singapore developer Qingjian Realty, as saying that CNQC International plans to expand its Hong Kong business from foundation piling and superstructure work into property development.
At the time, Cheng said that CNQC International goal was to have four redevelopment projects in the city by the end of 2018.
Yau Tong Targetted for Redevelopment
Located at the Kowloon end of the Eastern Harbour Tunnel, Yau Tong was once considered as a remote industrial outpost of shipyards, sand depots, sawmills and recycling stations.
The Hong Kong government initially proposed a 264-hectare district revitalization for the development and redevelopment of the area two decades ago. However, Yau Tong’s transformation has been slowed down due to the scattered ownership of many of the existing factory assets.
Currently there are only four relatively new housing estates in the area: Peninsula East by Wheelock Properties, Ocean One by Lai Sun Group, Canaryside by Asia Standard and The Spectacle by Henderson Land. More units, however, are expected to be released into the market in the near future.
New Projects on the Way in Kowloon East
Among the redevelopment projects on the way in Yau Tong is a HK$3 billion mixed-use complex jointly developed by Wang On Properties and CIFI Holdings at Sze Shan Street, which is slated for completion in 2020. Also in the area is a 680-flat residential project from mainland state-owned developer Minmetals Land which aims for 2022 delivery.
Last month, China Poly Property bested a field of nine primarily local competitors including Sun Hung Kai Properties, CK Asset Holdings, New World Development to win a 39,708 square foot Yau Tong residential site for HK$3.3 billion (US$420.42 million), adding further impetus to the neighborhood’s growing future residential appeal.
In May of this year, Sino Land and CSI Properties joined forces to acquire a 43,400 square foot site in Yau Tong at a land premium of HK$1.515 billion.