2024-05-03 28Hse Editor
(Lai Chi-tin) Land site prices have fallen in tandem with property prices. The successful bid for the residential site at the junction of Sai Ning Street and Victoria Road in Kennedy Town, Western District, was announced yesterday, with Wheelock Properties beating out five other bidders to win the site for HK$1.72 billion at about $7,071 per square foot.
This is in line with market expectations, but is a record low for Hong Kong Island in more than 21 years. Compared with a smaller residential site near Sai Ning Street, which was acquired by Great Harvest Group at HK$9,500 per square foot in November last year, the premium for the same area has dropped by 25.5 per cent in seven months.
Stewart Leung Chi-kin comments
With a maximum of 243,266 square feet for pure residential development, the site is approximately 24,326 square feet in size and can be used for commercial and residential purposes. Stewart Leung Chi-kin, chairman of Wheelock Properties, described the site as a rare and unique area in Hong Kong Island, with access to a sea view. He added that Wheelock has had extensive experience in developing on Hong Kong Island and is familiar with the advantages of the area, having launched a number of high-end residential projects in the same district.
Alvin Lam, director at Midland Surveyors, said said that the site currently has development constraints. According to the terms of the land sale, the site development will require the relocation of the existing bus terminus and its future reprovisioning, which will lengthen the development period and add additional costs. In addition, the site is currently separated from the waterfront by a warehouse building, which will block views of the low- and mid-rise units in the future. With the general market conditions continuing to adjust, a more cautious bid from the developer can be expected.
Hong Kong Island's floor space is at a new 21-year low
Lam added that another site in the same district was sold at the end of last year for about HK$440 million, with a floor area of about HK$9,500 per square foot, so this time, it was granted at a floor area of HK$7,070 per square foot – a discount of more than 20 per cent. He believes that the Government has adjusted prices based on market price.
James Cheung, executive director at Centaline Surveyors, said that the project's record low land premium since June of 2002 was believed to be related to the complexity of the site development terms and economic uncertainty. The project’s development period is nine years, beyond the typical six years, with greater risk. High interest rates due to the US interest rate hike, rising construction costs and the lack of bids from Mainland real estate companies have made developers very cautious in their bids. The lack of abortive bids reflects the Government's intention to promote land and increase supply.
It is worth noting that the project is adjacent to the existing Victoria Public Mortuary, which will be relocated to the site at the west end of Victoria Road in 2028 at the earliest. Although the project is near the waterfront, some of the units may not have a sea view as the China Merchants Godown project opposite may be redeveloped into a shopping mall and hotel. Public housing will also be built on Ka Wai Man Road to the south, which will also affect view quality.
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