Stand-out site in Causeway Bay secured for nearly $20b

Top News | Kevin Xu 13 May 2021

Hysan Development and Chinachem Group have won the tender for a commercial site on Caroline Hill Road in Causeway Bay for HK$19.78 billion - or HK$18,374 per buildable square foot - beating market estimates.

It was the first plot to be sold at more than HK$10 billion through government tender this year.

Market surveyors had valued the commercial site at HK$11 billion to HK$17.2 billion.

The other bidders included Sun Hung Kai Properties, Wheelock Properties, CK Asset, Link Real Estate Investment Trust and a consortium consisting of Sino Land, Lifestyle International, Kerry Properties and C C Land.

The plot, which was rezoned after serving as the Electrical and Mechanical Services Department's former headquarters, covers an area of 159,305 sq ft and provides a total gross floor area of 1,076,391 sq ft.

The site is near the Leighton Centre office building and Hysan Place and Lee Gardens shopping malls, all of which are developed by Hysan, the biggest landlord in Causeway Bay.

Hysan holds a 60 percent stake in the plot and Chinachem holds the remaining 40 percent.

Hysan said the project expands the scale of the Lee Gardens portfolio and will generate additional stable recurring rental income.

In addition to retail and office space, the project will provide community facilities and public open space, said Donald Choi Wun-hing, executive director and chief executive of Chinachem.

Community facilities to be provided will include a childcare center, an elderly day-care center and a district health center, totaling more than 20,000 sq ft in area, and a public open space of more than 65,000 sq ft will also be created within the site, Chinachem said.

The winning price bodes well for the tender of site 3 at the New Central Harbourfront, said Alvin Lam Tsz-pun, director of Midland Surveyors.

The tender for the 516,312-sq-ft harborfront plot in Central, one of the most anticipated land sales this year, will close next month.

Instead of the conventional cash-only tender, the government is opting for a "two-envelope" bidding process, which entails a financial and a design proposal.

This implies that the highest bidder may not win.

Hong Kong's office and retail property segments are still struggling to regain footing amid the pandemic-fueled downturn, with foreign companies relinquishing space in the city's famously pricey office market to cut costs and work-from-home arrangements gaining traction.

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