HK$10 billion Kai Tak site attracts six bids as firms say they are positive about Hong Kong housing market
- Six developers submit tenders for Area 4B Site 1 at Kai Tak
- Phase 11 of Lohas Park attracts 29 registrations of interest, says MTR Corp
Six developers have submitted tenders for a site in Kai Tak, Hong Kong’s Lands Department said on Friday, with companies saying they remained positive about the city’s housing sector following a recent pick up in prices and dovish monetary policy that has rekindled a cooling market.
Among the companies vying for Area 4B Site 1 in Kai Tak are Sun Hung Kai Properties, CK Asset, Chinachem Group, K&K Property and a joint venture between K Wah International and Sino Land. A consortium of New World Development, Henderson Land Development, Wheelock Properties and China Overseas Land and Investment has also submitted a bid.
The Kai Tak site can yield 722,060 sq ft in gross floor area for a total land price of HK$9.4 billion to HK$10.8 billion, or HK$13,500 per square foot, according to CHFT Advisory and Appraisal and Knight Frank.
“We are confident about the prospects of the housing market,” said Ewa Lam, administration manager at K&K.
Thomas Lam, executive director at Knight Frank, said: “The number of bidders is within expectations, but [the response] is not very enthusiastic.” He attributed the lack of an overwhelming response to a large investment of up to HK$17 billion (US$2.17 billion), the US-China trade war, a proposed tax on vacant new homes and lack of transport infrastructure and amenities.
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“The parcel commands a large investment so some developers chose to form a consortium to diversify risks,” said Lam.
A wide variety of choices at Kai Tak has also diverted developers’ attention, said Alvin Lam, director at Midland Surveyors, adding that they will be selective despite the recently benign market sentiment. Lam added he was cautiously optimistic about market prospects.
Meanwhile, Phase 11 of Lohas Park, the first tender in the area in three years, has attracted 29 registrations of interest, in line with Knight Frank’s expectations, MTR Corp said on Friday.
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Phase 11 can yield 1,850 homes on 956,468 sq ft of gross floor area. The land premium will be HK$4.78 billion, or HK$5,000 per square foot, according to Centaline Surveyors.
These came after the US Federal Reserve said on Wednesday it would not raise interest rates this year, and Carrie Lam Cheng Yuet-ngor, Hong Kong’s head of government, expressed concerns about housing affordability on Thursday.
Prices rose by another 2.8 per cent between February and March 17, according to the Centa-City Leading Index, which is compiled by Centaline Property Agency. Investment banks Nomura and CLSA have said they expect home prices to rise by 15 per cent this year, although a forecast by DBS sees prices dropping by 10 per cent.
“The uptrend in home prices is certain and can sustain until the middle of this year,” said Wong Leung-sing, senior associate director of research at Centaline. “The US Federal Reserve’s announcement … will stoke home prices and the effect will only be reflected mid-April.”
