URA gets six bids for Kowloon site

Himo Liu

The Urban Renewal Authority received at least six bids for the Shing Tak Street/Ma Tau Chung Road redevelopment project in Kowloon City, including ones from New World Development (0017), Wheelock, Sino Land (0083) and K Wah International (0173).

One of the pilot schemes for the redevelopment of buildings belonging to civil servants co-operative building societies, it had earlier had received 32 expressions of interest.

The market valuation of the project ranges from HK$2.38 billion to HK$3.11 billion, or from HK$5,740 to HK$7,500 per square foot.

Vincent Cheung Kiu-cho, the managing director of Vincorn Consulting and Appraisal, said that the consecutive unsuccessful bids for two sites in Tung Chung may not necessarily influence developers' pricing strategies for this project.

However, bids may be impacted by the number of East Kowloon projects nearing completion and the current high-interest environment and Cheung didn't dismiss the possibility that the sale might fail.

The project spans 46,103 sq ft and is expected to yield around 640 homes.

Market watchers believe that if the project is sold for more than HK$8.25 billion, equivalent to HK$19,884 per sq ft, 40 percent of the additional profit will be allocated to the URA as a bonus dividend.

Since the start of 2022 till now, four government sites - excluding MTR Corporation (0066) and URA plots - have failed to sell, exceeding the combined total of three sites for the preceding seven-year period of 2015 to 2021, says JLL, which anticipates there will be more land tender withdrawals.