Henderson Land Development has completed a more than decade-long consolidation of a site for a redevelopment project in Hong Kong’s Hung Hom area as it bought up the last pieces of an eight-storey building for HK$482 million ($62 million).
After previously purchasing more than 80 percent of 22, 22A and 24 Whampoa Street and 88, 90 and 90A Baker Street, the building titan was able to acquire the 1957-vintage walk-up in the eastern part of Kowloon City through a compulsory sale.
Last Thursday’s transaction, which was managed by JLL under the city’s compulsory sale law, allows the developer to add the ageing building’s 4,675 square foot (434 square metre) site to a 112,050 square foot plot that it has been consolidating since 2010.
In Henderson’s 2020 final results released this week, the blue chip developer confirmed that it had “completed the acquisition of all projects in Hung Hom recently”, unifying an urban renewal site expected to yield 1,008,352 square feet of gross floor area for a mixed residential and commercial project.
Cynthia Li, senior director of the projects strategy and consultancy department at JLL Hong Kong, hailed the local housing market’s “strong resilience” during the COVID-19 outbreak, noting that it gave developers the confidence to continue to invest in the residential market.
“Given that the sites put up for sale by the government in the coming year will be mostly for low-density residential development or in the New Territories, the lack of land supply in urban areas is expected to worsen,” Li told Mingtiandi. “We might see more developers acquire old buildings for redevelopment in urban areas with potential.”
Henderson’s acquisition at the junction of Whampoa and Baker has five retail shops and one storehouse on the ground floor. The first to seventh floors are for domestic use and are served by two common staircases.
At a plot ratio of 9, the property will yield 42,075 square feet of built area, meaning Henderson paid roughly HK$11,456 ($1,475) per square foot.
In rapidly gentrifying Hung Hom, the company founded by billionaire Lee Shau-kee is employing a redevelopment strategy similar to the approach it took with a set of sites acquired in West Kowloon starting in 2017.
For that project, called Square Mile, Henderson transformed a set of properties acquired at least in part through compulsory sales into a multi-building, mixed-use development.
Henderson grabbed its first foothold in the Hung Hom project in 2010, when it acquired a 3,000 square foot site at 31-33 Whampoa Street.
Then in 2019 the developer of Hong Kong’s H Code mall and the AIA Tower in North Point added several more pieces along Whampoa and Baker through compulsory sales, including a pair of sites measuring a combined 12,625 square feet and five buildings spanning 19,700 square feet.
Following that burst of activity two years ago, 2020’s COVID crisis meant that Henderson had to wait until this month to complete the jigsaw.
Compulsory sales have picked up again in 2021 to clear a logjam caused by the pandemic, JLL’s Li said. Earlier this month the agency also presided over the forced sale of 93 and 95 Catchick Street in Kennedy Town, the remaining pieces of which were acquired by local developer Easyknit International for HK$190 million.
The city’s Lands Tribunal received a total of 35 compulsory sale applications in 2020, down slightly from the 37 it received in 2019.