Chinese Company Got Two Plots of “HK-People’s-Land” for HK$4.6b

AM730               

6th June 2013

<Chinese Company Got Two Plots of “HK-People’s-Land” for HK$4.6b>

中資46億奪兩幅港人港地

China Overseas Holdings, which has a strong Chinese background, beat the Hong Kong developers with a bidding price of HK$4.54 billion (USD$585 million), and won the bid for the two plots of land in Kai Tak area, which are bound by the “Hong Kong Land for Hong Kong People” policy. Paul Chan Mo-po, Secretary for Development, commented that the bid received substantial interests and the government will speed up the sale of lands that are bound by “Hong Kong Land for Hong Kong People” policy, and will look into legislating the policy and make it a long term one.

The Lands Department pointed out that the two residential sites in Kai Tak zone 1H (land code: 1H1 and 1H2) were awarded to Ace Dragon Development Limited (parent company: China Overseas & Investment Limited) for HK$2.27 billion (US$293 million) each. China Overseas beat the four major developers, namely Cheung Kong, Henderson Land, Sun Hung Kai and New World Development. When the tender for the sites began, the Lands Department received 16 and 13 tenders on the sites respectively.  Yau Wai-kwong, Managing Director at China Overseas Property Limited, said that before the company submitted the tenders, they have already taken the “Hong Kong Land for Hong Kong People” policy and the surrounding convenient transport network of the sites into account. He estimated that total investment for these two sites will amount to HK$9 billion (US$1.16 billion) and takes around three to four years to complete. China Overseas Property has been actively purchasing land in Hong Kong recently, including the bid of the Pak Tai Street project in To Kwa Wan from Urban Renewal Authority.

James Cheung King-tat, Executive Director at Centaline Surveyors Limited, said that the average cost of the two sites is HK$5,100 per sq. ft. (US$660), which is around the highest market expectation. The price shows that the “Hong Kong Land for Hong Kong People” and other property price cool down policies have calmed down the property market, but have limited effect on developers’ bidding price. The future of Hong Kong’s property market continues to be bullish. A market practitioner expected that when the units are ready for sale, it will cost at least HK$10,000/sq. ft. (US$1290) The 1H1 lot is around 83,000 sq. ft. with a maximum permitted gross floor area of 418,000 sq. ft. supplying at least 545 units. Lot 1H2 is approximately 94,400 sq. ft. with a maximum permitted gross floor area of 462,000 sq. ft. supplying at least 600 units.

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