(By Yan Lunle)
The bid for land site of the luxury project in No.135 Tai Hang Road, Mid-level was opened yesterday, and CITIC Pacific won for HKD3.2 billion under the competition up to 25 consortiums, and the sq ft floor area land price is about HKD24,836 based on the buildable floor area of about 128,800 sq ft. Although the amount is within expectations, some surveyors do not agree that the land price has stabilized. The main reason is that the market valuation of the land had been conservative, and the winning bid price is still low, also it is believed the developers have calculated the risk from recent Sino-US trade war and social turmoil.
The Lands Department announced that No. 135, Tai Hang Road, Mid-Levels East was awarded by CITIC Pacific for HKD3.2 billion. Going through the data, the previous valuation of the land was between HKD2.1 billion and HKD5.4 billion, so the current transaction price is within expectations. The winning consortium, CITIC Pacific, seldom invested land in Hong Kong, and its previous winning land was Lok Wo Sha Lane land for HKD1.467 billion in Ma On Shan in May 2015, also it is developed into the new project "The Entrance" that offered prices in September this year.
Kwan Kit-ying: The land price of HKD3.2 billion is reasonable.
The Property Acting Director of CITIC Pacific, Kwan Kit-ying expresses, the land is located in the traditional first-tier luxury mansion area in Hong Kong Island enjoying full sea views, and the land price is reasonable, also it is planned to be developed into a top luxury mansion mainly provides medium-sized units, with the estimated investment at about HKD5.5 billion and the sq ft sale price in the future above from HKD50,000, besides feature units’ prices will challenge the new high sq ft price among tiered houses in Hong Kong Island. Kwan points out that the Group has confidence in the medium and long-term development of the property market in Hong Kong, and has always been interested in areas with development potential, also will continue to look for various high-quality development projects.
The Executive Director and Enterprise Development Department Director (valuation and property management) of Pu Jin, Cheong Shing-dium expresses, the bid price was actually lower than expected due to the recent uncertain market conditions, including the Sino-US trade war and social unrest, and it is believed the bid price has been calculated with the relevant risk.
Going through the data, the land had received as many as 25 tenders when the application was closed last week, setting a new record for the tender number of lands sold in the Hong Kong Island since the Government actively launched lands in 2011. Cheong Shing-dium points out that, the response to the bidding of the land was enthusiastic reflecting that the market considered the land attractive, but from the perspective of the successful bid price it can be seen that other developers generally were conservative on pricing.
The competition is fierce, but the bid is cautious.
The Executive Director and Director of the Valuation and Consulting Department of Knight Frank LLP, Lam Ho-man believes that the winning bid has an index effect on property prices in the district, and the ideal response shows the developer's confidence in the high-quality land and the luxury market in the future. The project is located in the traditional luxury mansion area and can be developed into mixed luxury mansions, including bungalows, also some units even can overlook Victoria Harbour, all above affecting developers’ bid.
The data shows that the site in No. 135 Tai Hang Road has a land area of 42,948 sq ft, with a maximum plot ratio of about 3 times, and the buildable floor area is 128,844 sq ft, besides the project development period will end on March 31, 2026.
It is worth noting that there is a slope problem on the southeast side of the site. The lease conditions stipulate that the buyer must bear the responsibility for slope repair and maintenance, and pay attention to the potential risks of landslides and gravel falls in the site and its northeast area. In addition to submitting the mitigation plan and related mitigation and consolidation projects for the above risks, the buyer also needs to submit reports for the project's air quality, sewage, and noise. Therefore, the buyer can apply to the Lands Department for amendments to the building area restrictions in the land lease if approved by the Town Planning Board in the future, and this means that the project has the potential to increase development potential.
