Intriguing plot in Central position

Editorial | Mary Ma 21 Jun 2021

The move to sell what is probably the city's most valuable site in the Central business district had a good start with six bids received before the deadline closed. Analysts had predicted between three and five bids.

On top of the number of bids, at least three observations can be made in relation to the landmark sale.

First of all, at least 10 developers are taking part in the exercise - and they are the biggest in town.

While some have submitted bids on their own - including Henderson Land Development, Sun Hung Kai and CK Asset Holdings - others have come together to form consortia to beef up sizes in light of the scale of the project.

For example, Sino Land has teamed up with China Merchants Group and Great Eagle Holdings.

However, it is the MTR Corp that has raised most eyebrows. The de facto government body has formed a consortium with Wharf Estate Investment and Chinachem Group to compete with other private developers.

MTRC is 75 percent owned by the government. Although concerned administration officials will excuse themselves from the process, it is of utmost importance to ensure the whole exercise is fair and provides a level playing field for every participant.

It is notable that only one mainland developer, China Merchants Group, is known to be taking part - and it is participating as a secondary member of a consortium rather than solely on its own.

This provides a huge contrast to the property scene a few years ago when mainland developers came in large numbers to overwhelm local land sales with record bids that soon sidelined their local peers.

Perhaps they now have a preference for residential projects that offer quick cash returns.

But could the lack of participation of these developers in what is arguably the SAR's most eye-catching land sale be a reflection of their current financial health?

Remember HNA Group, which had been active in procuring development plots at the former Kai Tak airport site?

To repay its debts, HNA sold its last plot of development land in Kai Tak in 2019 for about HK$6.9 billion, representing a loss of HK$550 million.

That said, a piece is still missing from the jigsaw puzzle. The Lands Department said six bids were received. So, after accounting for five bids - three separate developers and two consortia - who is the sixth?

Hongkong Land was rather shy when asked by the media whether or not it had submitted a tender. Its refusal to confirm or deny was unexpected as it is the largest commercial landlord in Central.

And the British developer had in the past expressed strong interest in the site.

The low profile may reflect the difficult situation that British and American companies face in doing business in the SAR nowadays as regional conflicts mount between Beijing and their respective governments.

So who will get the land? Whoever wins, it will boost confidence if a new record price is set.



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