Kai Tak runway parcel tender receives muted response even after valuation is cut by 15 per cent
South China Morning Post
Excerpt
Nov 8, 2019
Image posted on Ming Pao
The tender for a sea-facing parcel on the runway of Hong Kong's former airport received only four bids even after its valuation was cut by 15 per cent to reflect the worsening state of the city's economy after five months of social unrest, US-China trade war and looming vacancy tax.
Sun Hung Kai Properties, CK Asset, Sino Land and a consortium of China Overseas Land & Investment, Henderson Land Development, The Wharf (Holdings) and K Wah International put in bids for the residential parcel, Area 4A Site 2, in Kai Tak, which can yield a gross floor area of 1.2 million square feet, or 18.66 soccer fields.
"It is at the bottom of our expectation … as the environment is not very good. Before, there would be six or seven bids,” said Alex Leung, senior director at CHFT Advisory And Appraisal, who was expecting four to six bids.
He added that since the plot area was large only larger developers could participate.
Thomas Lam, executive director at Knight Frank, cut their valuation for the plot by 15 per cent to HK$19.8 billion (US$2.53 billion), or HK$15,500 to 16,500 per sq ft.
Lam said flats, most likely to range from 450 sq ft to 750 sq ft, could sell for more than HK$30,000 per sq ft, with the total development cost estimated at between HK$23 billion and HK$25 billion.