Hong Kong tycoon Victor Li Tzar-kuoi’s CK Asset Holdings won its first tender for land at Hong Kong’s old airport, Kai Tak, on Wednesday. The site, Area 4E Site 2, was also the last residential plot up for grabs on its runway.
The developer won the plot for HK$10.28 billion (US$1.33 billion), or HK$15,861 per square foot, the Lands Department said. Its price, at the upper end of market expectations, reflected confidence in the Kai Tak residential market among the city’s developers, surveyors said.
“The winning bid is a little higher than [what we] expected, and the price is very satisfactory. It shows that major developers are confident in the outlook for Kai Tak’s residential market,” said Thomas Lam, executive director at Knight Frank.
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The sale comes despite Hong Kong’s worst recession on record and rising unemployment. Market activity has, however, increased recently as the coronavirus outbreak is brought under control. For instance, Wheelock Properties sold more than 300 flats at its Monaco project at Kai Tak in half a month, underlining high demand for apartments in the area.
The tender attracted five bids, a number lower than market expectations, on Thursday last week. CK Asset beat K Wah International, Sino Land, Sun Hung Kai Properties and a joint venture of Wheelock Properties and Hysan Development. The price it paid is the highest on a per square foot basis since China Resources Land and Poly Property Group won Area 4C Site 1 at HK$18,080 per square foot in June 2019.
“We will strive to develop a high-quality downtown luxury project,” said a company spokeswoman. She said CK Asset was delighted that it had won the last residential plot on the Kai Tak runway at the beginning of the Year of the Ox, and added that the developer was confident about “Hong Kong’s future economy”.
The spokeswoman said the land had “excellent” conditions, and that it was rare to find an urban plot with sea views nowadays in Hong Kong. The land is located in the front row of the Kai Tak runway and is the only single-sided piece close to Victoria Harbour, she added.
Market valuations for the plot ranged from HK$8.4 billion to HK$10.6 billion. At a plot ratio of about 5.5 times, its gross floor area could go up to 648,143 sq ft. The site area is 117,844 sq ft. The land is likely to yield a mixed development with mainly medium-sized units. On completion, it could sell for HK$28,000 per square foot to be reasonably profitable, said Knight Frank’s Lam. Total investment in the plot could amount to HK$13.5 billion to HK$14.5 billion, he added.
Surveyors said that although it was smaller than the adjacent parcel, Area 4A Site 2, investment in CK Asset’s plot would still be huge.
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