Pack of developers in Lohas Park site chase

Business | Lucas Lo 24 Dec 2019

A tendering process for Phase 12 of Lohas Park in Tseung Kwan O was ending today with 33 letters of intent, the MTR Corp (0066) announced.

That is a record high of letters of intent for developments in the area.

Developers including China Overseas Land and Investment (0688), Sun Hung Kai Properties (0016), New World Development (0017) and Wheelock and Co (0020) were among those delivering letters.

The residential project above the The Lohas commercial center has a gross floor area of 961,100 square feet and will offer up to 2,000 flats. Surveyors believe the land premium will be lower than at Phase 11.

From a high in Lohas Park to a low for a flat at Residence Bel-Air at Pok Fu Lam yesterday. It changed hands for HK$16.6 million, or HK$22,615 per square foot - a bottom price in the project this year.

The owners of the flat, with a saleable area of 734 sq ft, asked originally for HK$19 million, but the deal was struck with 13 percent off that price. Still, the seller had bought the flat for HK$11.2 million in 2009.

Another deal that went through involved a 1,838 sf luxury house with a 271 sq ft garden and parking space at The Carmel in Tuen Mun. The house, developed by Wing Tai Properties, sold for HK$33.6 million.

Looking ahead, China Overseas Land and Investment (0688) has approval to build two 32-story and one eight-story residential buildings plus a luxury house at Kai Tak Area 4B, Site 2. The project has a total gross floor area of 594,300 sq ft, according to the Buildings Department.

And in Tai Kok Tsui, Henderson Land Development (0012) has unified the ownership of properties at 1 Ka Shin Street, 2 Pok Man Street, and 39-53 Tai Kok Tsui Road for HK$1.15 billion.

The aim is to build 210 small flats on a gross floor area of 86,778 sq ft, with a launch in about three years from now.

On the commercial front, vacant office space have continued to increase in Central, Wan Chai, Causeway Bay and Tsim Sha Tsui.

The 3.5-percent vacancy rate in Central last month was a four-year high, according to JLL research.

Meanwhile, the vacancy rate of offices rose to 5.9 percent overall across Hong Kong.

With that came a continuation of rental declines in November, with the average monthly office rent dropping to HK$73.9 psf - a 0.6 percent decline month on month.

Alex Barnes, head of markets for JLL in Hong Kong, said the leasing activity was dominated by tenants seeking more cost-effective options.

And Nelson Wong, JLL's head of research for Greater China and Hong Kong, said the comparatively few transactions recently have been at a discount.

Deals that did appear to have pushed through involved China Huarong (Macau) leasing 20,300 sq ft at One Pacific Place in Admiralty and Guosen Securities leasing 13,500 sq ft there.

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