Hong Kong’s Lands Department announced on March 22 that it had received six bids from a total of 10 developers for a 103,150 square foot (9,583 square meter) residential plot on the site of the city’s former Kai Tak Airport.
The land sale, which could add as much as HK$10.8 billion to the government’s coffers, took in the half-dozen bids from a set of home town developers less than two months after the city government cancelled a tender for an nearby commercial site due to a lack of buyer interest.
With 29 potential buyers registering official expressions of interest for a tender of residential site in the New Territories on the same day as the Kai Tak deadline, Hong Kong’s real estate market is showing signs of a gradual recovery from its downturn in the final months of 2018.
Local Players Vie for Housing Site on Former Runway
Among the 10 companies vying for Area 4B Site 1 in Kai Tak there were solo bids from Sun Hung Kai Properties, CK Asset Holdings, Chinachem Group and K&K Property. K Wah International and Sino Land also teamed up for a joint bid while a consortium of New World Development, Henderson Land Development, Wheelock Properties and China Overseas Land and Investment formed a club for their own try for the housing site. All ten of the contestant for the property are local Hong Kong firms.
The 103,150 square foot (9,583 square metre) plot can yield up to 722,060 square feet of housing by gross floor area, according to planning rules for the site. Should the land sell for the top expected price of HK$10.8 billion, it would be equivalent to HK$15,000 per square foot of housing.
The tender is just the latest in a series of housing site sales in Kai Tak, which has been a hub of redevelopment for the city. Three residential plots on the former runway have sold in the last four months, although this sale is the first after the lunary new year holiday, with housing sales having quickened over the last month.
In January, Hong Kong’s development giant Sun Hung Kai Properties was awarded a 10,956 square meter (117,900 square feet) parcel in Kai Tak for HK$11.26 billion ($1.43 billion), or around HK$17,360 per square foot of housing.
In December, SHK’s mainland competitor, China Overseas Land & Investment (COLI) had paid the equivalent of HK$13,523 per square foot for a nearby site, however, a planned sale of a 9,480 square metre commercial site in Kai Tak was cancelled in late January when no developers were willing to pay the auction’s reserve price.
Lohas Park Site Pulls in 29 EOI
A refresh in developer interest for housing sites should also be welcomed by Hong Kong MTR Corporation, with the transit operator having received 29 expressions of interest for a site in the city’s Lohas Park.
Local developers Wheelock & Company, New World Development, Chinachem, K Wah International, K&K Property Empire Group and Nan Fung Group are all said to have expressed interest. CITIC Pacific, the Hong Kong affiliate of mainland investment group CITIC and China Overseas Land & Investment are also said to be in the race.
Local media reports indicate that market analysts expect the site to sell for a price from HK$2.39 billion to HK$2.87 billion.
The expressions of interest allow companies to move to the next stage of the tender process for Phase 11 of the housing project in the Tseung Kwan O. This latest phase comes with approval to build up to 1,850 homes totaling 956,468 square feet of gross floor area.
Hong Kong’s housing market entered a months long period of decline starting last July with average home prices dropping by 9.2 percent between July and December last year after a 28-month streak of price increases, according to the city’s Rating and Valuation Department.
The city’s home prices edged up 0.08 percent in January and rose by another 2.8 percent between February and March 17, according to the Centa-City Leading Index, which is compiled by Centaline Property Agency.
Over this past weekend, four property projects in the city offering some 607 units in total were offered for sale in Lohas Park, To Kwa Wan, Yao Tong and West Kowloon in the biggest weekend launch in a year. As of 8 pm on Saturday, 496 of the homes, or nearly 82 percent, had been sold, according to the South China Morning Post.