Nearly a dozen mainland and Hong Kong developers have placed bids on a waterfront residential site that could be worth up to HK$22 billion ($2.82 billion) in Hong Kong’s Cheung Sha Wan area, following Sun Hung Kai’s purchase of an adjacent hotel plot last month.
Bidding on the parcel overlooking Victoria Harbour in New Kowloon closed on Friday after tenders were submitted by a total of 11 groups, news reports indicate. Hong Kong-based firms Chinachem Group, New World Development, Kerry Properties, CK Asset Holdings, Henderson Land Development, and Sun Hung Kai are said to be among the solo bidders.
Mainland property groups China Overseas Land and Investment (COLI), Logan Property Holdings and Shimao Property Holdings also competed for the site, according to reports by AAStocks Financial News and the South China Morning Post. Analysts believe the winning bid could set a new record for residential land in Hong Kong, exceeding the price of a waterfront housing site in Ap Lei Chau Island this past February.
HK, Mainland Builders Face Off in Cheung Sha Wan
The 19,348 square metre (208,260 square foot) site off Hing Wah Street West, called New Kowloon Inland Lot No 6549, allows for construction of gross floor area of up to 91,770 square metres (987,804 square feet) and a maximum height of 100 metres, according to information from the city’s Lands Department.
“The site is rectangular in shape and has good potential to develop into a luxury residential development,” commented Thomas Lam, Head of Valuation and Consultancy at Knight Frank Hong Kong to Mingtiandi.
Lam pointed out that the estimated site value is approximately HK$14.8 to HK$17.8 billion ($1.9 to $2.28 billion), or HK$15,000 to HK$18,000 ($1,922 to $2,307) per square foot of permitted floor area. “The total development cost could be up to HK$22 billion,” Lam added.
The site is estimated to yield more than 1,200 housing units, and the winning bidder is required to set aside more than 38,000 square feet (353 square metres) for ground-level public space including developing a waterfront promenade.
Price Could Set a New Record for Residential Land
The site lies on the northwest boundary of a hotel plot that was snapped up by Sun Hung Kai for HK$5.06 billion ($649 million) last month, after the development giant shouldered aside nine other Hong Kong-based bidders by offering 35 percent more than the highest previously reported offers.
The highest estimate for the price of the residential plot that was auctioned on Friday would surpass the HK$16.86 billion (US$2.16 billion) that a joint venture between mainland developers Logan Property and KWG Property paid for a housing parcel in Ap Lei Chau earlier this year.
Developers are betting that the formerly industrial Cheung Sha Wan neighbourhood will grow into a new commercial hub, assisted by its connectivity to the MTR system and a potential influx of corporate tenants migrating out of Central in search of more affordable offices. New World Development, which was among the bidders for the residential site, has bought up three commercial plots in the area this year for a total of HK$15 billion ($1.92 billion).
Market analysts had earlier predicted that a consortium bid may aim to coordinate development on the neighbouring residential and hotel sites.