Mainland real estate company won a Hong Kong residential land site again. Residential land site in Castle Peak Bay section, Castle Peak Road, District No.48, Tuen Mun had collected 16 tenders on last Friday, and Lands Department quickly opened the bid yesterday, announcing that Kaisa won the land for HKD3.5 billion, with the sq ft floor area land price at about HKD6,005. Kaisa as a dark horse is the first time to win Hong Kong's official land. The company expresses there is no specific development plan currently, but stressed that it is optimistic on the Hong Kong market and would continue to look for opportunities in Hong Kong.
(By Ngan LunLok)
Castle Peak Bay residential land in Tuen Mun is near Gold Coast, The Bloomsway and Harrow International School, covering about 145,772 sq ft, and it can build a total floor area of about HKD582,887 sq ft. Going through the data, the market had previously estimated the land value between about HKD2.91 billion and HKD3.79 billion, and the floor area sq ft land price is HKD5,000 to HKD6,500. Kaisa’s winning price of HKD3.5 billion is in line with the market expectation, and the floor area sq ft land price is about HKD6,005.
Tuen Mun land prices had fallen 7.6% in 5 months.
In recent years, a lot of land in the Tuen Mun area has been sold. For the previous two land sites, they are respectively district 56 Kwun Chui Road and junction of King Sau Lane and King Fung Path in Tuen Mun, which were sold in June 2017 and August 2019 with the sq ft floor area land prices at HKD6,700 and HKD6,499 respectively, and the land price this time respectively dropped by 10% and 7.6% than the above two.
This project had collected 16 tenders on last Friday, and the participating consortiums besides Kaisa include SHKP, Wheelock, Cheung Kong, Henderson, and other powerful real estate companies, also it was a surprise that Kaisa finally won. The Media and investor Relations Department Director of Kaisa, Choi Chun expresses, it is the first time for the company to win Hong Kong residential official land, and they look good to the development of the Greater Bay area also are confidence in the economic prospects of Hong Kong since it is one of the Greater Bay development, also believes that the role of the international financial center remains unchanged.
Kaisa: The project is under planning.
Despite the recent social turmoil in Hong Kong, he believes the impact is short-lived, stressing that the Hong Kong market remains attractive. He expresses that the company is still looking for development opportunities in Hong Kong, and has no specific interest in which type of land, while different plots will be studied, also does not exclude investment in old buildings for building renewal projects. As for the development direction of the land, he points out that the project is still in planning, and at this stage, the relevant investment amount or planning details could not be disclosed.
It is understood that Kaisa had defaulted on its debts at the end of 2014, but it has come out of the haze. Now, the company mainly develops real estate in the mainland, and its main business is in the Great Bay district. Because of its huge reserves for reformed old-fashioned housing, Kaisa has the title of "king of old-fashioned housing reform".
Local companies are conservative on pricing due to a lot of considerations.
The Managing Director of Wang Leung Consulting and Evaluation, Cheong Kiu-chor expresses, this price was on the high side, indicating that Chinese investors were making aggressive bids. He believes, the recent political events in Hong Kong have led Hong Kong real estate developers to give more consideration to land investment, plus their land reserve is generally more than China-invested enterprises who are urgent need for land development in Hong Kong, so their bids were significantly more conservative. According to the data, it is another Chinese company winning land in a short period, and CITIC Pacific had won Tai Hang Road No.135 residential land site for HKD3.2 billion on the 18th of last month.
Cheong Kiu-chor also points out that since the Government has made it clear that the supply of private housing land will be reduced every year, coupled with competition from Chinese investors, it is believed that in the future, there will be more and more competition in land bidding and less discount in the land price.
The Executive Director and Valuation and Consultation Director of Knight Frank LLP, Lam Ho-Man expresses, the project is expected to build small and medium-sized units with a total investment of about HKD5.5 billion to HKD6.5 billion and the sq ft price will be above HKD14,000 after completion. He points out that the bid price reflects developers' confidence in the future market, and in recent years there is not much land supply for small and medium-sized units, so individual developers need to increase land reserves and development projects.
He adds that the traffic of the project is not bad, but the business and living facilities in the area are insufficient. Due to the irregular shape of the land, it will be difficult to develop it. Also, it is known that there are potential risks such as landslip and gravel falling, as well as the nearby tombs, so there are certain challenges for the developers to develop.
