Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Wednesday, May 29, 2024

Li Ka-shing’s property unit gets bargain on Kai Tak land at US$1.12 billion

Li Ka-shing’s property unit gets bargain on Kai Tak land at US$1.12 billion

CK Asset will pay 2014 prices for a parcel above the Sung Wong Toi MTR station that is expected to accommodate about 1,750 homes.

Tycoon Li Ka-shing’s flagship property developer has picked up land in Kai Tak at 2014 prices, winning the biggest government land sale this quarter at a price almost 25 per cent below market expectations.

CK Asset will pay HK$8.7 billion (US$1.12 billion) for a plot on top of Sung Wong Toi MTR station, according to a statement from the Lands Department on Wednesday. The price translates to HK$6,138 per square foot – the lowest for a residential parcel in the area in eight years – amid slumping home sales and mounting supply of new homes.

The plot, officially designated Kai Tak Area 2A Site 4, Site 5(B) and Site 10, has a gross floor area of 1.42 million sq ft, and is expected to accommodate about 1,750 homes. CK Asset beat Nan Fung Development, Henderson Land Development, Wheelock Properties, Early Light Land (Holdings) and a consortium of K. Wah International, Sino Land and Great Eagle Holdings.

CK Asset is “very happy to win a large-scale parcel in the Kai Tak New Area at a reasonable price this time,” Executive Director Grace Woo Chia Ching said in a statement. “The small and medium-sized residential units are expected to be very popular upon completion and can hopefully bring very desirable returns,” Woo said.


The land sold on Wednesday is numbered 28 on this map of the parcels in the Kai Tak area, former site of Hong Kong’s airport.

The location is superior because of the MTR station, Woo said, adding that a planned underground shopping street will connect to Kowloon City and Kai Tak MTR Station.

Valuations ranged from HK$11.34 billion to HK$14.89 billion, which translates to HK$8,000 to HK$10,500 per square foot.

“We valued it at HK$8,000 per square foot,” Vincent Cheung, managing director of Vincorn Consulting and Appraisal, told the Post. “It was already very low – the lowest in Hong Kong. But now it turned out to be even lower.”

The price is less than half of the HK$15,861 per square foot that CK Asset paid in February 2021 for another parcel with sea views on the former airport’s runway.

Wheelock Properties paid HK$6,101 per sq ft for what is now Oasis Kai Tak, near the Kai Tak MTR station, in May 2014.

The land sold on Wednesday was originally zoned for commercial use. The tender was withdrawn in 2020, and the land was finally re-zoned by the government for residential use.

There are some restrictions on development, which will increase construction costs, according to Midland Surveyors, which said the total investment will exceed HK$15 billion.

Cheung said developers offered lower bids to balance risks given that the Centa-City Leading (CCL) Index, a gauge of lived-in home prices compiled by Centaline Property Agency, has declined 17.1 per cent since its peak of 191.34 in early August 2021.

“Developers these two years bought a lot of residential and commercial parcels,” Cheung said. They are now facing high inventory amid sluggish sales, as buyers hold off due to economic conditions and high interest rates, he said.

Supply “suddenly surged” in recent years, with land sold in West Kowloon, Kwun Tong’s Anderson Road, Causeway Bay’s Caroline Hill Road and Site 3 of New Central Harbourfront.

Developers have turned cautious about tenders, a fact that became more obvious in the fourth quarter as government sites sold at or below the lower end of market expectations.

“Developers will continue to be conservative in land bidding and land prices will continue to fall in 2023,” said Alkan Au, senior director of valuation advisory at JLL. “The decline in land prices will be more than housing prices. The construction costs are still on an upwards trajectory and will be fuelled by the looming inflation. The interest rate hikes have significantly increased financial costs.”

This is the fourth winning bid for CK Asset this year amid the depressed prices. It forked out HK$20.46 billion in total for two redevelopment projects and two government parcels. And Wednesday’s win came less than a week after CK Asset picked up an Urban Renewal Authority redevelopment project in Sai Ying Pun for HK$1.16 billion, or just HK$9,554 per square foot – 27 per cent below the price paid for a nearby project in August.

The government has generated HK$21.8 billion from land sales and lease modifications or land exchanges as of December 13, reaching about one-fifth of the land income target for the current financial year.

JLL estimated the government could generate an extra of HK$35.5 billion from the tender of government sites, URA and MTR projects by the end of the current financial year in March.

Including the previous land income, the government may not be able to achieve its land income target of HK$120 billion for the financial year, JLL added.

Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×