A waterfront hotel site in the Cheung Sha Wan area of Hong Kong’s New Kowloon may sell for as much as HK$3.74 billion ($479 million), following a competitive public tender that closed on Friday after drawing 10 bids.
The site, New Kowloon Inland Lot No. 6550 off Hing Wah Street West, has an area of about 4,800 square metres (51,667 square feet) and is designated for a hotel building up to 100 metres tall, with a maximum gross floor area of 34,770 square metres (374,261 square feet), according to an announcement by the city’s Lands Department.
Hong Kong-based developers and hotel operators dominated the bidding for the 50-year leasehold site, with offers ranging from HK$2.17 billion ($278 million) to HK$3.74 billion, according to the Hong Kong Economic Times. The highest bid would value the site at HK$9,886 ($1,267) per square foot of buildable area.
Hong Kong Heavyweights Bid on Hotel Site
The bidders included local property giants CK Asset Holdings, Henderson Land Development, Sino Land Company and Sun Hung Kai Properties. Also competing for the site was a joint venture between local developers Billion Development & Project Management and Asia Standard International Group; boutique developer K&K Property; developer and hotel operator Far East Consortium International; and Regal Hotels International, a Hong Kong-based hospitality operator with a portfolio of over 10,000 rooms.
The hotel site lies adjacent to a residential plot which is also up for tender, leading market analysts to predict that a consortium bid will look to coordinate development on the two plots. New Kowloon Inland Lot No 6549 has a site area of 19,348 square metres and could yield up to 91,770 square metres of housing. Bidding for that site, which has been valued at HK$10 billion, is due to close on Friday, November 10th.
Magnificent Hotel Investments, which operates a portfolio of Ramada and Best Western properties, also submitted a bid. A representative of the Hong Kong-based firm said Magnificent intended to invest HK$4 billion to build a 1,500-room hotel on the site if it emerges victorious from the tender process.
An unknown financial group is also said to have submitted a tender. The winning bidder will be announced no later than December 22.
Cheung Sha Wan Heats Up
Located near the Nam Cheung MTR station, the site overlooking Victoria Harbour borders a proposed road running parallel to the West Kowloon Highway. Besides the hotel, the total floor area of the property may also include up to 13,908 square metres (149,704 square feet) of ancillary facilities and up to 3,477 square metres (37,426 square feet) of retail or food and beverage space.
The tender is the latest sign of interest in the real estate prospects of Cheung Sha Wan, part of the emerging Kowloon West business hub which is set for a wave of new office space. New World Development has picked up three commercial sites in the neighbourhood this year for a total of HK$15 billion ($1.92 billion).
The sale of the hotel site would also give a lift to the city’s hospitality property sector. This week it was reported that the 299-room Rosedale Hotel in Causeway Bay is being sold to a director of Shun Ho Property Investments for HK$1.65 billion ($211.4 million). And in August, retail billionaire Tang Shing-bor purchased the 80-key Hotel Bonaparte in Wan Chai for HK$450 million ($57.5 million).