The Hong Kong government has awarded a waterfront site in Cheung Sha Wan to a consortium of five Hong Kong and mainland developers for HK$17.28 billion ($2.21 billion), breaking price records for residential land in the city.
The winning consortium, Sky Asia Properties Limited, includes Hong Kong firms Sino Land, Wheelock Properties, K Wah International and SEA Holdings as well as mainland developer Shimao Property, according to an announcement by the city’s Lands Department. Bidding on the 19,348 square metre (208,260 square foot) parcel closed last Friday, with tenders received from a total of 11 Hong Kong and mainland groups.
The winning bid is at the upper end of market expectations, as analysts had estimated the site could be worth anywhere from HK$14.8 to HK$17.8 billion ($1.9 to $2.28 billion), and equates to HK$17,493 ($2,241) per square foot of buildable area.
Waterfront Parcel May Yield 1,200 Apartments
Awarded on a 50-year land grant, the site located off Hing Wah Street West is earmarked for private residential purposes with a maximum gross floor area of 91,770 square metres (987,804 square feet). The site, New Kowloon Inland Lot No 6549, is expected to bring more than 1,200 housing units to the market.
In a comment to Mingtiandi last week, Thomas Lam, Head of Valuation and Consultancy at Knight Frank Hong Kong, said the site is suitable to be developed into a luxury residential property. Lam estimated that the total development cost could reach as much as HK$22 billion ($2.82 billion).
The completed property may be up to 100 metres tall, and the site’s new owners are required to develop a waterfront promenade as part of a public space covering more than 353 square metres (38,000 square feet).
The site lies directly to the northwest of a hotel parcel that was bought up by Hong Kong developer Sun Hung Kai for HK$5.06 billion ($649 million) last month. Sun Hung Kai, which beat nine other Hong Kong firms in the contest for the hotel land, also placed an unsuccessful tender for the newly-sold residential plot.
Sino Land Helps Break Price Record – Again
The premium for the residential site makes it the most expensive housing parcel in Hong Kong, exceeding the HK$16.86 billion ($2.16 billion) total that a joint venture between mainland developers Logan Property and KWG Property paid for a waterfront plot on Ap Lei Chau island this past February – although that site cost more per square foot of gross floor area, at HK$22,118 ($2,850).
Sino Land previously broke price records in the Ma On Shan area of Sha Tin by outbidding dozens of rivals to purchase a waterfront residential site for HK$1.38 billion ($176.7 million) in July. That New Territories deal broke a pattern whereby mainland developers or cross-border joint ventures had scooped up all the residential plots auctioned in Hong Kong since the start of the year.
The Singapore-linked property group also teamed up with K Wah International and China Overseas Land & Investment in May of this year to buy a residential project in the New Territories’ Yuen Long for HK$8.33 billion.
Cheung Sha Wan, a former industrial area of Kowloon West, is emerging as a commercial hub and already has a number of completed housing complexes. The neighbourhood has attracted keen interest from property builders, including Hong Kong’s New World Development, which has spent a total of HK$15 billion ($1.92 billion) picking up three commercial sites in Cheung Sha Wan this year.
New World, which now has a land bank of 2.1 million square feet in the area, plans to invest some HK$25 billion ($3.2 billion) to create what it calls an “emerging industrial cluster” designed for tech startups in Kowloon West.