Hong Kong Property Land King may get US $7.1billion for Harbour Front Site

Posted on 17 June, 2021 | By Property852

Hong Kong’s land king may fetch up to US$7.1 billion as the Central harbor front site goes on sale.

The prime Central harbor front site is the largest mega-sized plot to be listed in the city's main business district. It will likely set a record for the highest property sale in the history of HK, noted property consultants.

Under the government’s system for the New Central Harbor Front Commercial Site 3, bids submitted will be weighed on price and design. Tender for the 516,316 site could yield an area of 1.6 million square feet. Bids will close Friday at noon.

Due to the value of the plots strategically, serious bidders will submit innovative designs and high prices, since it is the last waterfront commercial site in Central, noted Vincent Cheung, Vincorn Consulting and Appraisal’s managing director.

Cheung predicts the site, adjacent to the IFC, will fetch approximately HK$55 billion (US$7.1 billion), about HK$34,000 a square foot, the upper end of the HK$37 billion to HK$55 billion valuation.

Cheung said it will likely be a record in HK land sales.

Since the mid-2019 anti-government protests, and Covid-19 last year, HK's property market had been weak. However, it has since trended upward.. As the city’s economy resumed growth, droves of buyers are returning, and developers are bidding high on tendered plots.

SHKP (Sun Hung Kai Properties) currently holds HK's record for the highest-priced land purchase. They are the largest developer in HK in market value, and, in November 2019, they purchased commercial land over the railway terminus on Austin Road in West Kowloon, at a record HK$42.23 billion.

Midland Surveyors director, Alvin Lam, shared Cheung’s viewpoint. Due to the rarity and extensive size of the plot, it’s likely the costliest lot by value, Lam said. His estimate was that the site would yield up to HK$48 billion, or HK$30,000 a square foot.

Lam stated that recent sales of commercial sites at higher than anticipated prices signal developers have recaptured market confidence. The Central project, which will take several years, will be completed when the market is fully recovered, Lam predicted.

Chinachem and Hysan bid HK$19.77 billion last month for a Caroline Hill Road commercial plot in Causeway Bay, 15 percent above the market’s top expectation of HK$17.2 billion.

Those bidding on the site must submit technical design proposals including a model and premium proposal enclosed in separate envelopes prior to Friday at noon.

The Post reached out to ten of Hong Kong’s most prominent developers, asking if they were participating in the tender. Henderson Land Development was the only developer indicating they would bid. All the others declined comments.

We will participate stated Martin Lee, Henderson Land’s co-chairman. The company was founded by Lee Shau-kee who is Hong Kong’s second wealthiest man, with a net worth totaling US$33.9 billion.

SHKP and Henderson Land were both members of a consortium which developed the IFC.

Hongkong Land, the biggest Central landlord, would not comment.

As a Central major stakeholder, we regard developing Central Harbor Front site as reinforcing Central’s prime ecosystem and enhancing its desirability as Hong Kong’s pre-eminent commercial district, stated Raymond Chow, executive director. Hong Kong Land holds a 450,000 square meter (4.84 million square feet) real estate portfolio, which includes three Exchange Square office buildings and Landmark, a luxury shopping center.

Chinachem Group’s chief executive, Donald Choi, stated that the parcel is a rare remaining Central waterfront site, making it attractive, and that they were reviewing the offer.

Choi said, however, that construction costs due to complicated road traffic and underground rail transit lines would be extremely expensive.

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