Major players enter fray for $6b Kai Tak site

A residential site in Kai Tak worth up to nearly HK$6 billion has drawn six bids from major local property developers when the tender closed yesterday, the Lands Department said.

CK Asset (1113), Sun Hung Kai Properties (0016), Henderson Land Development (0012), Wheelock Properties and Nan Fung Group were said to be among the bidders for the 13,499-square-meter site.

And a consortium formed by Sino Land (0083), Great Eagle (0041), Chinese Estates (0127), and state-owned China Overseas Land & Investment (0688) also reportedly submitted its bid.

The plot, Kai Tak Area 2A Site 2 and Site 3, will provide a supply of 1,325 flats totaling 92,185 sq m when completed.

Its market valuation ranges from HK$4.47 billion to HK$5.96 billion, or from HK$4,500 to HK$6,000 per sq ft.

That was even lower than the price of an adjacent site CK acquired last year. The developer purchased it for HK$6,138 per sq - the lowest in Kai Tak since May 2014 and 23 percent below the lower end of market expectation - in December, which was seen as a bargain at the time.

The purchaser of the new site is required to construct around 175 meters of the underground shopping street, which is around 11 percent of the total Kai Tak underground street by length, as well as six social welfare facilities of around 42,000 sq ft which is excluded from the total floor area of the site. The facilities include a neighborhood elderly center, day activity center, and hostel for the mentally handicapped.

The plot is near the Sung Wong Toi MTR Station, but the provisions of the underground street and government accommodations are expected to increase the construction cost and time to a certain extent, and thus be reflected in bids, said Alvin Lam Tsz-pun, director at Midland Surveyors.

Coupled with the sluggish property market, Lam expects the developers' bids to be conservative.

This came as data from the Inland Revenue Department showed Hong Kong's overall stamp duty revenues from property purchases nearly halved last month from July to the lowest since October at HK$295 million. The number of transactions involved, though, rose 3 percent to 201 in August.

Revenue from buyer's stamp duty, which applies to non-permanent resident and company purchases, slumped by 61 percent to HK$230.4 million, despite cases only down by just 5 percent to 54 in the month.

In the primary market, Road King Infrastructure (1098) said it may unveil the first price list of at least 139 units for its new project Mori in Tuen Mun this week, and the sales may take place within the month.