28Hse-Hong Kong Property
Hong Kong Property Market - Yr.2020 Aug: Average price per sq feet $11577 2.4%   (last month:$11862)
Home  - News
News and article search:
   Previous News: (YYYYMMDD)
Property News
Property News(Eng)
New Homes
HK Gov.policy
Trend
Transactions
Mortgage
Auction
Artists
Commercial
Land news
Promotion
Oversea Property
New Homes
Price info.
Promotion
Photo gallery
Living in Hong Kong
Districts
Expert Blog
Wed Property Focus
ToKuHon
Ownfirstflat
Manywells
MReferral
18 Property
Mr. Poon
Frankie K.S. Wong
KongKaiOn
News content

Super Consortium Bought Kai Tak Seascape Site at Price Lower 15% than Floor Level.

Image Caption
2019-11-14-(Thu)
【28Hse.com】  
Hong Kong Wen Wei Po (By Ngan Lun-lok)

The land price took the lead to plummet after the property market experienced a five-month policy amendment turmoil. The bidding for No.2 seascape residential site in Kai Tak district 4A opened yesterday, and a consortium formed by China Overseas Land & Investment, Henderson, K.Wah, and The Wharf Limited won with the winning bid price at HKD15.9529 billion, making it the most expensive land in the runway area. However, base on the buildable area of 1,205,100 sq ft, the floor area sq ft land price is about HKD13,238, 15% lower than the market's expected lower limit of HKD15,500 per sq ft, and lower 23.7%-32.6% than the floor area sq ft price of No.1-3 land sites nearby also viewing Victoria Harbour seascape in district 4C.

Consortium with China Overseas Land & Investment as the lead company won it by nearly HKD16 billion.

The Lands Department announced yesterday that consortium formed by China Overseas Land & Investment, Henderson, K.Wah, and The Wharf Limited won the No.2 land site in Kai Tak district 4A for HKD15.9529 billion, with each floor area sq ft land price at about HKD13,238. It is worth noting that K.Wah International, Wheelock Properties and China Overseas have already invested more than HKD12.7 billion in the No. 1 residential land of Kai Tak district 4A in this July, and the consortium combination won the bid of No. 2 site in district 4A this time is close to that of the last time, adding Henderson. The market estimates that these two sites will be merged and developed to achieve synergy. It is estimated that the project will be built into a mixed-style mansion, mainly of small and medium-sized units, and the sq ft price will start from HKD29,000 after the finish.
7 developers own 6 sites in the former runway area.

In fact, a "super consortium" based on Wheelock Properties and China Overseas has already owned many land sites in the Kai Tak Runway area. To date, this consortium has a total of 7 developer members and owns 6 land sites in the former runway area involving land prices totaled about HKD67.5319 billion, with the total floor area in about 4.81 million sq ft. As the sites are adjacent to each other, it is believed developers will have some communication in the planning direction and launch time in the future.

Going through the data, in addition to the above-mentioned No. 1 and No. 2 sites in district 4A, in November last year, Wheelock Real Estate had partnered with New World, Henderson Land, and Empire Group to win the No. 3 site in district 4B for HKD8.333 billion. Later, at the end of March of this year, the consortium formed by Wheelock Real Estate, Henderson Land, New World, and China Overseas won the No. 1 Site in district 4B for HKD9.893 billion. In May, the consortium of six developers including Wheelock, New World, China Overseas, Henderson Land, Chinachem, and the Empire Group spent HKD12.59 billion to win the No. 2 site of Kai Tak district 4C. China Overseas independently invested in the No. 2 site in district 4B for approximately HKD8.033 billion in December last year.

Leong Chi-kin: Project investment exceeds HKD20 billion.

The Vice-chairman of same series The Wharf Limited, Leong Chi-kin yesterday expressed, the project investment amounted to over HKD20 billion, and believed the winning price this time is market level, although the floor area sq ft land price was cheaper than that of sites sold in the same district, he pointed out that current market conditions are different from before, but he believed that social unrest will sooner or later settle down. He also pointed out that there is still demand in the market, and there are still transactions in the first-hand property market, also he believed that the property market has not been affected too much, so the property prices will not fall sharply, besides property prices are expected to fall by about 5% in the short-term.

It is 33% lower than the highest sq ft price of the site viewing the same landscape.

According to market estimates, the previous valuation lower limit of the project was HKD18.7 billion, and the floor area sq ft land price lower limit was about HKD15,500, thus the current transaction price is 15% lower than the market expected lower limit. Although the total price of the project has broken the new high record in the runway area, the floor area sq ft land price is not the lowest in the runway area, and the floor area sq ft land prices for previous land sites of No.1-3 in district 4C having the same Victoria Harbour full view seascape were from HKD17,360 to HKD19,636, in other words, the transaction sq ft price of this time is lower from 23.7% to 32.6%.

It is reflected developers are more cautious about the market outlook.

The executive director and director of the valuation and consulting department of the Knight Frank, Lam Ho-man expresses, the bid price was lower than expected, reflecting that developers are more cautious about the market outlook, and they are more conservative on pricing due to the worry of profits infected by market situation, vacant taxes and so on even it is a large-scale seascape project. The project is tendered by consortiums due to a large amount of investment also help to share development risks and sell properties in the future. The current land transaction price is low, indicating that the government had offered more attractive floor price close to the market level on selling lands.

It is understood that although the project is a full sea view fireworks scene land site also has roads leading to Kwun Tong, there is still a distance from Kai Tak Station and the living facilities are also inadequate. About 8% of the floor area requires to be used for a variety of social welfare facilities, and the government will buy-back this part at construction cost, but the relevant provisions might have affected the developer's bid to a certain extent.
Translated by 28Hse.com . All right reserved.