The Hong Kong government has for the first time in its history postponed the tender of a large waterfront residential site at the former Kai Tak airport after violent street protests against a controversial extradition bill rocked the city.
“The Central Tender Board announces that the closing time for tenders to be received through the Government Secretariat Tender Box by noon tomorrow [June 14] will be extended until further notice, due to blockage of the public access to the Government Secretariat Tender Box,” the government said in a media release on Thursday morning. “Following removal of the blockage, the [board] will announce the extended tender closing time as soon as practicable.”
The tender, which was to take place on Friday, was expected to fetch a record price of up to HK$20,000 per square foot (US$2,555) or HK$14.3 billion for the site, according to surveyors’ estimates. The residential site, Area 4C Site 1, could yield a floor area of up to 714,374 sq ft.
Vincent Cheung, managing director of Vincorn Conculting and Appraisal, said that a land tender in the city had never been postponed before.
Even Thomas Lam, executive director at Knight Frank, said that he could not recall such an instance previously. He however expected the tender to be delayed for at least two weeks until the protests come to a complete end, as the government will not want to take any chances with such a large tender.
“Market confidence will be dampened if there are too few bidders or it is withdrawn from sale again,” he said.
The setback comes just two days after Goldin Financial walked away from a HK$11.1 billion winning bid for a plot of commercial land on Kai Tak’s runway, forfeiting its HK$25 million deposit because of what the developer called “social contradiction and economic instability” in the city.
Following Sunday’s peaceful march in which an estimated 1 million people turned out to protest against the government’s controversial extradition bill, Hong Kong was thrown into turmoil on Wednesday when the protests turned violent. Police fired tear gas and rubber bullets, as tens of thousands surrounded the Legislative Council to block lawmakers from debating the bill.
Vanke to sell 251 flats in Tuen Mun on Sunday, defying downbeat mood amid trade war, street protests and rising rates
The protests have sent a message to the market that uncertainty is growing, making the developers more cautious, said Kevin Tsui, associate professor of economics at Clemson University in South Carolina, citing Goldin’s move to renege on its deal.
James Cheung, a surveyor at Centaline Surveyors, said not much must be read into Goldin’s move to scrap its deal. He said that as there is enormous user demand for homes, there should not be a major impact on the value of the residential parcel.
The residential site on Kai Tak’s runway with unrestricted sea views could set a new price record, Cheung said.
More from South China Morning Post:
- Fewer developers submit bids for Kai Tak runway plot even as valuation is slashed to January 2017 levels
- First commercial plot on Kai Tak runway fails to take off as Hong Kong rejects all nine bids for site
- First land plot for sale on the former runway at Kai Tak receives ‘lacklustre’ response from developers