Kai Tak rezoning for three sites to bring more homes

The SAR is considering rezoning five commercial sites in Kowloon East for residential use, which could accommodate about 5,800 private housing units, and the potential land supply for the whole year is expected to provide about 16,500 units.

Sources said the five plots sit in the Kai Tak development area, three of which were previously tendered unsuccessfully.

The three sites - area 4C site 4, area 4C site 5 and New Kowloon inland lot 6615 - were withdrawn from sale over the past two years, as the government and developers failed to agree on valuations.

Last May, the Lands Department canceled the tender for lot 6615 at Kai Tak area 2A site 4, site 5(B) and site 10, as "the tendered premiums did not meet the government's reserve price for the site."

Goldin Financial had originally won the tender for 4C site 4 for HK$11.12 billion, or more than HK$12,800 per sq ft, in May 2019 but forfeited a HK$25 million deposit by walking away from the deal a month later as the Sino-US trade war rattled the property market. In September that year, all five bids made for the site were rejected for not meeting the reserve price.

Earlier, in January 2019, the government scrapped the sale of Kai Tak area 4C site 5 after bids failed to meet the reserve price.

The plan is for the site of the former airport to be redeveloped into Hong Kong's second main business district.

Meanwhile, a total of 15 residential sites - capable of offering about 6,000 residential units - and three commercial sites will be offered for sale in the next fiscal year, said Paul Chan.

The three commercial sites will provide 480,000 square meters, which is a drop of over 40 percent compared to the 830,000 sq m spread over the six commercial sites announced last year.

"A lighter touch on commercial land is perhaps appropriate at a time when office and retail space supply is abundant in the pipeline," said Marcos Chan, head of research at CBRE Hong Kong.

The government estimates the completion of private residential units will average over 18,000 units annually in the five years from 2021, down from an estimate of 19,600 made last year.

The further reduction in private residential units offered under government development sites signals a potential shortfall in the medium-term residential supply in and around 2025 to 2027, said Marcos Chan. "Shortage in future supply will continue to provide support for private residential capital values," he said.

Separately, new development area projects and other development projects under planning are expected to provide a total of over 860 hectares of brownfield sites in the New Territories, which can be redeveloped for housing and other land use.

The government has also identified land for the provision of 316,000 public housing units in the coming 10 years.