A pair of Hong Kong-listed developers, Wing Tai Properties and CSI Properties, has triumphed over eight other bidders to win the rights to redevelop a site in the city’s Central district, agreeing to pay a reported HK$11.6 billion ($1.49 billion) for the project at Peel and Graham Streets.
Targetted for completion in 2012, the project will total 434,000 square feet (40,320 square metres) for office, hotel and retail usage, along with a public open space of at least 14,100 square feet (1,310 square metres).
Wing Tai did not reveal the price of the winning bid in a Tuesday statement announcing the deal. The HK$11.6 billion price tag reported by The Standard, citing market sources, equates to around HK$26,728 per square foot, and surpasses market expectations, with property analysts having anticipated bids ranging from HK$8.2 billion ($1.05 billion) to HK$11 billion ($1.41 billion).
Prime Piece of Central To Be Redeveloped
“We are pleased to have won the project, which forms an integral part of a mega-redevelopment initiative in Central that supports the preservation of the heritage and revitalisation of the neighbourhood,” commented Edward Cheng, deputy chairman and chief executive of Wing Tai Properties Limited in a statement. “We look forward to a fruitful collaboration with the URA as our partner.”
Hong Kong’s Urban Renewal Authority (URA) received nine tenders after inviting a total of 27 property groups to bid on the site. Other bidders included local development heavyweights CK Asset Holdings (Cheung Kong Group), Sun Hung Kai Properties, New World Development, Wheelock Properties, Henderson Land, Kerry Properties, and Great Eagle Holdings. In addition, Sino Land submitted a joint bid with department store operator Lifestyle China.
The 28,901 square foot (2,685 square metre) Site C of the Peel Street / Graham Street redevelopment scheme is located less than 500 metres west of the Central MTR station. The winning developers are required to preserve the Wing Woo Grocery at 120 Wellington Street, a historical structure within the redevelopment area that was home to a retail shop for over 80 years.
Cheung Kong Group and Sino Land are building residential projects on two adjacent sites as part of the larger urban redevelopment effort. The costly acquisition in Hong Kong’s financial district comes five months after Henderson Land bought the Murray Road site in Central for HK$23.3 billion ($3 billion), or HK$50,064 per square foot for the landmark project.
Latest Big-Ticket Site Goes To Smaller Players
Hong Kong-focussed Wing Tai Properties has developed over 7.5 million square feet (700,000 square metres) of real estate including grade A offices and luxury homes. The group, which operates under the Wing Tai Asia brand for its development business, also manages and invests in hospitality assets under its pan-Asian Lanson Place brand.
Wing Tai is also ramping up its presence in Singapore, with local affiliate Wing Tai Land teaming up with Keppel Land to build more than 600 homes in the Serangoon Garden neighbourhood of the city-state. The Singaporean developer duo bought the prime residential site for S$446.3 million ($327 million) in August.
CSI Properties is a niche player with around 2 million square feet (185,806 square metres) of properties under management and development in Hong Kong and Shanghai. The Hong Kong-listed developer controlled by Mico Chung Cho-yee specialises in luxury condos and commercial projects.