Henderson Land Development is set to take full ownership of a 42,506 square foot (3,948 square metre) site in Kowloon, with the developer having won approval for the compulsory sale of the remaining space in an ageing building in Hong Kong’s To Kwa Wan neighbourhood, according to recently released government records.
The approval by the city’s Lands Tribunal places a reserve valuation of HK$1.2 billion ($152.8 million) on 68A to 70C To Kwa Wan Road, clearing the way for Henderson to acquire the remaining space in the property under Hong Kong’s rules governing compulsory sales for redevelopment, which encourage replacement of ageing properties.
The compulsory sale, which has yet to be scheduled, would give Henderson ownership of three out of four adjoining To Kwa Wan sites and open the door for the developer to build a residential and commercial project worth as much as HK$9 billion ($1.2 billion), according to Alex Leung, senior director at CHFT Advisory and Appraisal.
Should Henderson follow through on the acquisition and win approval to merge the target property with an adjacent building it acquired in March and another connecting property it purchased last November, the company will have acquired three of the four sites which it needs to develop a project spanning 374,355 square feet of gross floor area. After having acquired the two adjoining sites through separate forced auctions, Henderson is also actively acquiring space in a fourth building which it needs to consolidate the project in the area just south of Kai Tak.
68A to 70C To Kwa Wan Road is about six minutes’ walk from To Kwa Wan MTR station, which opened for service in June of last year, with Henderson having established 94.7 percent ownership in the building before the compulsory sale was approved.
Excluding its adjoining plots, the site on its own can yield up to 104,465 square feet of floor area, which translates to HK$11,487 per square foot of gross floor area at the reserve valuation.
The developer had applied for a forced sale of the property in 2018 and has since added nearly 8 percent to its holdings. Within 2019, it submitted applications for three other sites in the same area, in which it had established more than 80 percent ownership.
Last October, Henderson won approval from the Buildings Department for a redevelopment scheme for the consolidated To Kwa Wan site, which provides for construction of a 27-storey residential building atop a three-storey retail podium once it gains full ownership of all four properties.
Should each flat in Henderson’s proposed project average 400 to 500 square feet of saleable area upon completion, the price for each unit could run from HK$11 million to HK$13 million, according to Cyrus Fong, senior director for valuation and advisory at Knight Frank.
Selling prices for new homes in To Kwa Wan currently fall between HK$21,000 and HK$27,000 per square foot based on saleable area, Fong said.
To Kwa Wan Makeover
To Kwa Wan is a top target for redevelopment projects, as its clusters of old tenement blocks gain value thanks to new rail connections and as the area benefits from a number of government-organised urban renewal efforts, said Vincent Cheung, managing director at Vincorn Consulting and Appraisal.
“With various redevelopment projects in place, including large-scale projects by the URA, and with the opening of the To Kwa Wan MTR station last year, the area will have a new look in the next few years,” Leung said.
In addition to its acquisitions through compulsory sales, in September of last year Henderson won a residential project along Ma Tau Wai Road for HK$8.1 billion through a tender held by the Urban Renewal Authority. That project is located just a few minutes’ walk from 68A to 70C To Kwa Wan Road in the area where To Kwa Wan borders Hung Hom to the south.
Outside of To Kwa Wan, the developer controlled by the family of billionaire Lee Shau-kee recently won approval for the compulsory sale of a property spanning 17 to 25 Sun Chun Street in Causeway Bay at a reserve price of HK$588.7 million, according to a press release from JLL, which is the auctioneer for the sale.