The Urban Renewal Authority's mega project in Kwun Tong was withdrawn after receiving only one bid.

Upon the closing date of tender submission on January 11, 2023, the only bid received was from Sun Hung Kai Properties (0016) for its Kwun Tong Town Centre Development Areas 4 & 5 project. The board of authority then rejected the tender after deliberating the submission.

As the commercial property market has declined recently, the URA has introduced "floating planning parameters" to increase adjustability and avoid bidding failures.

These parameters allow developers to flexibly allocate the floor area of commercial, office and hotel facilities, which means that the winning developer can abandon the facility's construction.

The Kwun Tong Town Centre project, which has lasted for over 20 years, is the largest single redevelopment project ever launched by the URA. It will be developed in five phases.

The now-withdrawn project is the final development space with a site area of 275,500 square feet which can be reconstructed into buildings with a total floor area of about 2.2 million sq ft.

Before the tender was closed, the valuation of the project ranged between HK$8.7 billion and HK$13 billion - or HK$4,000 and HK$6,000 per square foot - down by up to 50 percent from August last year.

When the project was launched and began to receive expressions of interest last August, the market valuation reached HK$25.9 billion.

However, due to the softening of market sentiment, the project valuation was reduced to between HK$4,300 and HK$10,000 per sq ft mid-November, representing a valuation range of HK$9.31 billion to HK$21.66 billion.

Initially, the project received 24 expressions of interest last September and the URA invited 19 developers and consortiums to bid - including Henderson Land (0012), CK Asset (1113), Sino Land (0083), China Overseas (0688), SHKP and others.

This is the second bidding case withdrawn this year. On January 10, a site in Stanley had only received four tenders but they did not reach the government's reserve price.

In other news, the Planning Department has given the green light to New World Development's (0017) project in Kwun Tong.

The site covers an area of about 20,001 sq ft at No 73 to No 75 Hung To Road and the latest plan will increase the plot ratio to 14.4 times by redeveloping it into a 29-story commercial building with a total floor area of 288,008 sq ft.

A view of the site. SING TAO

URA withdraws mega Kwun Tong tender