Consortium wins development rights to MTR’s Wong Chuk Hang residential project at a lower premium than earlier phase

Lam Ka-sing
·2-min read

A consortium of four Hong Kong developers has won the development rights for the latest residential project at Wong Chuk Hang MTR station, which has been acquired at a lower premium than the previous phase.

Kayson Limited, comprising New World Development, Empire Group, Lai Sun Development and CSI Properties, won the tender for the fifth phase of the project at Wong Chuk Hang station on the South Island line, railway operator MTR Corp said on Wednesday.

“The pandemic has not affected the developers’ determination to continue buying and investing in land,” said James Cheung, executive director at Centaline Surveyors. “The government has slowed down the pace of land launches [so] high-quality lots along the railway are even rarer.”

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Kayson beat Sun Hung Kai Properties, CK Asset, K Wah International and two other consortiums. Notably, the bidders were all local developers.

Six bids were placed for the right to develop the plot above Wong Chuk Hang station. Photo: Felix Wong
Six bids were placed for the right to develop the plot above Wong Chuk Hang station. Photo: Felix Wong

The premium for the project, which the winner pays the government for the development rights, was set at HK$6.44 billion (US$830.4 million), or HK$10,119 per sq ft.

The premium is 4.4 per cent lower than phase four, according to market sources. Bidders, however, had to offer an extra undisclosed amount to compete for the latest project, they added.

The winner will also have to share about 25 per cent of the project’s profits with the MTR.

Cheung said that as sentiment has been affected by the fourth wave of the coronavirus pandemic, the government had adjusted the land premium accordingly to reflect market conditions.

He said that the flats built on the parcel were most likely to be medium-sized units, and could fetch up to HK$30,000 per sq ft.

The plot can yield a gross floor area of as much as 636,152 sq ft, which could accommodate up to 1,050 flats with an average size of around 600 sq ft.

New World Development’s The Pavilia Farm residential project above Tai Wai MTR station. Photo: Xiaomei Chen
New World Development’s The Pavilia Farm residential project above Tai Wai MTR station. Photo: Xiaomei Chen

The project, the penultimate one at Wong Chuk Hang station, received just six bids on Tuesday, fewer than the seven to eight expected by the market. The project had attracted 37 expressions of interest, the third-highest for an MTR railway development.

New World Development and CSI Properties have previously participated in the MTR’s property developments at Tai Wai and Yau Tong stations, respectively. New World’s The Pavilia Farm project, comprising 3,090 flats spread over many phases above Tai Wai station, has been a hit with homebuyers.

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