Hong Kong Tests Market with Tender for Kowloon Residential Site

The Hong Kong government will launch a small Kowloon residential site for tender before the end of this year, testing developer appetites for new projects in the city after having held back urban housing plots in the previous two quarters.

The site on Choi Hing Road in Jordan Valley is expected to yield about 570 flats and will be offered via the government’s land sale programme for the third financial quarter, the Development Bureau announced Thursday.

“We hold an optimistic view towards the successful sale of this plot,” said Hong Kong’s Secretary for Development Bernadette Linn Hon-ho said at a press conference, where she highlighted the site’s location in a “mature community”.

The tender comes after the city’s private residential property price index rose for five consecutive months through August, notching a cumulative increase of 1.3 percent in the April-August period, according to the Rating and Valuation Department, prompting some analysts to call a bottom to the market. 

Location Challenges

While Linn sounded a positive note on the tender, analysts pointed to issues with the location of the 40,902 square foot (3,800 square metre) plot. 

“The maximum developable gross floor area of this Kowloon site is approximately 368,100 square feet. It is not located in a convenient location. We expect the price of this land could be in the region of HK$1.2 billion to HK$1.3 billion,” Alex Leung, chief surveyor at CHFT Advisory and Appraisal, told Mingtiandi.

The Kowloon plot was one of eight residential sites that Financial Secretary Paul Chan Mo-po had included in the annual land sale programme announced in February. Originally designated for government, institutional and community uses, the plot is currently being rezoned for housing, Linn said at the press conference.

Located near New Clear Water Bay Road on Ngau Tau Kok Hill in the Kowloon urban area, the site is approximately one kilometre from the nearest MTR station. The government will require the developer to reserve part of the site for social welfare facilities. 

Alkan Au, head of value and risk advisory at JLL, considers the location of the site “reasonably acceptable” as future residents are expected to rely on nearby public housing estates such as Choi Wan Estate and Choi Tak Estate for commercial amenities and minibus services for transit to the MTR line. “However, bidding prices are expected to remain cautious,” he noted.

Hannah Jeong, executive director, head of valuation & advisory services at CBRE in Hong Kong sees the tender benefiting from the site’s small scale and location. 

“The site benefits from established infrastructure and amenities. It is also situated within a reputable school district, surrounded by several well-known schools, making it highly attractive to families with children,” Jeong said.

Clearing Inventory

The Kowloon land tender comes after Hong Kong launched only one residential site in the quarter ended 30 September, with the exercise for that 780 home project  in Tsuen Wan, New Territories set to close in mid-November.

Earlier this month Hong Kong’s MTR Corp launched a tender for a 1,280-home project in Tuen Mun with that land sale set to close on 5 November.

Sun Hung Kai Properties won the only government site offered for sale in the last three months of 2024 with the developer being awarded the plot in Sha Tin, New Territories for HK$606 million in January. 

SHKP also won the only government residential plot offered during the first three months of this year, picking up a site in the Tung Chung area near Hong Kong International Airport at the lowest rate seen in more than a decade during February.