Former Hong Kong airport site sells at low end of expectations, signalling caution as major developers scout for residential land
- The largest residential site at the former Kai Tak airport has been sold to a consortium of four major developers for HK$9.89 billion (US$1.26 billion)
- The plot can yield 722,060 sq ft in gross floor area
The largest residential site at Hong Kong’s former Kai Tak airport has been sold to a consortium of four major developers, including Henderson Land Development and Wheelock Properties, for HK$9.89 billion (US$1.26 billion), matching the low end of expectations as developers adopt a cautious market outlook.
The Lands Department awarded the tender for the plot, which can yield 722,060 sq ft in gross floor area, to Infinite Sun on Wednesday. Other members of the alliance include China Overseas Land & Investment and New World Development.
At HK$13,701 per square foot of gross floor area, the successful bid for the Kai Tak Area 4B Site 1 ranks as the second-lowest for a purely residential plot in the old runway area. Market expectations were for the site to fetch between HK$9.4 billion to HK$10.8 billion, or HK$13,000 to HK$15,000 per square foot.
“Teaming up, which can avoid direct competition with each other and bidding up the price, seems to be a best answer to be in the game while not paying too much and taking too much risk,” said Charles Chan, managing director at Savills Valuation and Professional Service.
“We saw in a number of occasions in recent years that developers joined together and formed consortiums to bid for large government sites,” said Dorothy Chow, senior director at JLL’s valuation department.
“The market has still been uncertain in terms of the outcome of the US-China trade war, interest rate movements and external economic conditions.”
Such caution, however, is in contrast to a straw poll conducted by the Post indicating more than half of market observers believe that the correction in Hong Kong’s home prices is over.
