Hong Kong Real Estate Report
Henderson Land Development (0012) paid a record HK$23.28 billion for the government’s Murray Road five-story public car park today
The Lands Department announced that the site offers about 2,880 square meters and is designated for non-industrial uses.
The price paid by billionaire Lee Shau-kee’s company translates to HK$51,600 per square foot.
Units of real estate heavyweights, Cheung Kong Property; The Wharf (Holdings); Hang Lung Properties; C C Land Holdings, a consortium involving Sino Land Company, Shimao Property Holdings and New World Development Company; Nan Fung Development; Chinese Estates Holdings, and Sun Hung Kai Properties were among the other bidders for the commercial site in Central.
The minimum gross floor area and the maximum gross floor area are 25,920 sq m and 43,200 sq m respectively, both including the gross floor area of a public vehicle park to be constructed by the purchaser.
Henderson Land has beaten eight rivals to snap up a highly coveted commercial site on Murray Road in Central for HK$23.3 billion, or HK$50,065 per square foot.
That makes it the most expensive property ever sold by the government – and one of the world’s most expensive commercial sites.
The price was about 4 percent above the upper range of market valuation. The market had valued the site at about HK$14 billion to HK$22.3 billion, or HK$30,000 to HK$48,000 per sq ft.
The site takes up an area of about 31,000 sq ft, with maximum gross floor area of 465,005 sq ft. Height limit for the site is 190 meters, and a commercial building of some 40 stories can be built.
“We are delighted to have captured this site in Central, and we plan to develop the project into another landmark commercial building following the International Financial Centre,” said Henderson Land vice chairman Martin Lee Ka-shing.
Henderson Land, chaired by tycoon Lee Shau-kee, was part of the consortium that developed the commercial site at Hong Kong Station into the iconic IFC.
Henderson Land expects to invest about HK$26 billion on the Murray Road project, and to complete it in 2022.
As the site was previously a multi- story carpark, the developer winning the tender will have to provide more than 100 parking spaces for public use. The area used for carparks will have to be calculated as part of the gross floor area, but if the parking spots are set up in the basement, the developer can apply for the area taken up not to be counted in the gross floor area.
Other developers bidding for the site included Cheung Kong Property, The Wharf, Hang Lung Properties, Sun Hung Kai Properties, C C Land, Chinese Estates, and Nan Fung Development. Sino Land, Shimao Property, and New World Development submitted a joint bid.
“The price of the site was slightly above expectations,” said Knight Frank senior director Thomas Lam Ho-man, adding: “Monthly rent for the project after completion could reach above HK$170 per square foot.”
Lam said he expects rents of grade- A commercial buildings in Central and Admiralty to continue rising in the coming one to two years.
Meanwhile, a residential site at Kai Tak was awarded yesterday to a joint venture of two mainland developers – KWG Property and Longfor Properties – for HK$7.23 billion, or about HK$12,563 per sq ft.
It was the first site in Hong Kong acquired by Beijing-based Longfor Properties.
The price was close to the upper range of market valuation of about HK$6.3 billion to HK$7.5 billion, or HK$11,000 to HK$13,000 per sq ft.
Size of the site is about 104,636 sq ft, with maximum gross floor area of about 575,492 sq ft.
The Kai Tak site received a total of 16 bids. Other bidders included China Overseas Land, Henderson Land, Cheung Kong Property, Sun Hung Kai Properties, and K Wah, among others.
Lam said the good sales performance of flats at Kai Tak has boosted the confidence of developers in bidding for the site.
“Total costs for the development of the Kai Tak project could be over HK$12 billion, and prices per saleable square foot of the project after completion could reach HK$23,000,” he said.
Said Centaline Surveyors executive director James Cheung King-tat: “A total of 12 residential sites were launched for tender from Kai Tak over the past four years, and prices per square foot for half of those sites were over HK$10,000. It shows that the developers are positive on the prospects for Kai Tak.”