Developers including Sun Hung Kai Properties, CK Asset and Henderson Land are showing continued interest in a gentrifying Kowloon neighbourhood as a tender for a HK$5.5 billion ($700.9 million) residential project in the To Kwa Wan area last week attracted 31 expressions of interest.
Other local players including Sino Group and Great Eagle, as well as mainland investors like China Merchants and China Overseas Land & Investment, are also competing for the Wing Kwong Street/Sung On Street Development Project, which is the fifth site put up for tender in To Kwa Wan this year by Hong Kong’s Urban Renewal Authority (URA), said Ryan Ip, head of land and housing research at local think-tank Our Hong Kong Foundation.
Competition for the site in the ageing neighbourhood north of Hung Hom and southwest of Kai Tak comes as improved connectivity and focused government initiatives have made To Kwa Wan a focus of new home building, despite a lukewarm Hong Kong housing market.
Once the URA has shortlisted qualified developers to submit tenders for the project, the site on Wing Kwong Street and Sung On Street is expected to draw in bids as high as HK$3.34 billion, based on an accommodation value of up to HK$12,000 per square foot, said Alex Leung, senior director at CHFT Advisory and Appraisal.
Kowloon Pipeline Grows
The winning bidder would hold the rights to develop as much as 278,613 square feet (25,884 square metres) of gross floor area, of which 46,177 square feet would be reserved for retail space, according to URA project guidelines.
Upon completion, which could happen as early as 2026, the project is estimated to yield as many as 560 new homes, said Leung. Based on an average home size of 340 square feet of saleable area, flats in the project could sell for around HK$9 million to HK$10 million, he added.
The 30,957 square foot redevelopment site spans addresses from 44 to 54A Ngan Hon Street and 72 to 118 Wing Kwong Street and is about a 10 minutes’ walk from the To Kwa Wan MTR station, which opened for service in June of last year. Situated opposite the Church Of Christ In China Kei To Secondary School, the site is also a few blocks south of To Kwa Wan’s Hoi Sham Park.
Homes in the project could cost up to HK$29,411 per square foot of floor area, according to Leung’s estimated price per flat in the project, which would surpass the upper end of selling prices for new homes in To Kwa Wan by about 17 percent.
Selling prices for new homes in To Kwa Wan average HK$24,000 to HK$25,000 per square foot of saleable area, according to Leung.
“The (project) is expected to yield residential units with sea views upon completion,” Ip said, noting that the views, coupled with improved transport connectivity in the area due to the recent extension of the MTR’s Tuen Ma Line, would drive developer interest.
To Kwa Wan Catches On
Developer interest in the Wing Kwong Street/Sung On Street project is part of a surge of activity in the section of Kowloon City over the past year.
“Given the support from the URA in reconfiguring To Kwa Wan through enhancing its connectivity and street vibrancy via redevelopment, the site (will enjoy synergies) with other URA redevelopment projects in the area,” said Ip.
In March of this year, CK Asset Holdings, the development flagship of magnate Li Ka-Shing, bested six competing bids in a URA tender to win a 58,534 square foot residential site in To Kwa Wan for HK$5.99 billion.
About one month before that win, Hong Kong’s Hysan Development and privately-held Empire Group agreed to each acquire 25 percent stakes in the URA’s Bailey Street/Wing Kwong Street project from Henderson Land for a combined HK$6.1 billion, after Henderson had won the project in a URA tender in September last year for HK$8.1 billion. The Bailey Street/Wing Kwong Street project is located just two blocks west of the Wing Kwong Street/Sung On Street project.
Also in To Kwa Wan, Henderson is set to acquire full ownership of four adjoining sites through compulsory sales for redevelopment, which would make way for it to build a residential and commercial project worth as much as HK$9 billion upon completion.