URA’s Kwun Tong town centre redevelopment tender likely to draw muted response amid bleak economic outlook, analysts say

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Only three to four bids can be expected from top developers because of the ‘large and long-term investment’, says Alex Leung of CHFT Advisory

Market observers expect the site to fetch between HK$18 billion and HK$20 billion, compared with earlier estimates of as much as HK$26 billion

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The Kwun Tong Town Centre Development Areas 4 and 5 Project covers an area of 275,502 sq ft. Photo: Jonathan Wong

Lam Ka-sing

Published: 8:30am, 17 Aug 2022Updated: 8:40am, 17 Aug 2022

The upcoming tender for the last phase of Kwun Tong town centre’s mega redevelopment will test the market’s resilience amid a weakening economy and high office vacancy rates in the area, market observers say.

The Kwun Tong Town Centre Project, which aims to turn the old district into a “small Taikoo Shing”, is the Urban Renewal Authority’s largest redevelopment project to date. The entire project occupies a site area of more than 500,000 sq ft spread over five plots and has been undertaken in phases since 2007. Taikoo Shing is Swire Group’s development in Quarry Bay, which includes flats, offices, a hotel and shopping centre.

Following the withdrawal of tenders for three commercial sites in the nearby Kai Tak Development area in 2019 and 2020, property consultants said they do not expect the Kwun Tong tender to draw many bids.

Only three to four bids can be expected from top developers because of the “large and long-term investment”, said Alex Leung, senior director at CHFT Advisory and Appraisal. “The market is no longer normal since the outbreak of Covid-19.”

The Kwun Tong Town Centre Project occupies a site area of more than 500,000 square feet spread over five plots. Photo: Handout

Last week, the URA asked developers and consortiums to formally show their interest in undertaking the Kwun Tong Town Centre Development Areas 4 and 5 Project. The deadline for submitting expressions of interest is September 7.

URA’s Kwun Tong town centre redevelopment tender likely to draw muted response amid bleak economic outlook, analysts say

Only three to four bids can be expected from top developers because of the ‘large and long-term investment’, says Alex Leung of CHFT Advisory Market observers expect the site to fetch between HK$18 billion and HK$20 billion, compared with earlier estimates of as much as HK$26 billion

Only three to four bids can be expected from top developers because of the ‘large and long-term investment’, says Alex Leung of CHFT Advisory

Market observers expect the site to fetch between HK$18 billion and HK$20 billion, compared with earlier estimates of as much as HK$26 billion