Kai Tak commercial site has more than 2.4 billion approvals. Low expectations of 12%
The intensification of social riots has caused heavy damage to the Hong Kong economy. Developers are also more cautious in competing for commercial land. After the bidding for the commercial tenders in Kai Tak District and the completion of the tender, a commercial site of Chengqi Road, which was closed on Friday, was approved at a low market floor valuation of about 12%. From the Far East Development (00035) More than 2.445 billion yuan was won. The developer expects a total investment of about 4 billion yuan.
Chengqi Road commercial land, which can be used to build office buildings and hotels, is one of the commercial supporting areas of Kai Tak Sports Park. Since the Gaoyin Group abandoned the transaction for a commercial/hotel site in Kai Tak in June, and the subsequent social unrest turned into a series of unsettled riots, the stripping response and transaction price of the site were highly regarded by the market. The industry has previously lowered the valuation of the site by more than 10%, worth about 2.8 billion to 3.6 billion yuan.
Super good price cast land
When the site was closed last week, it attracted 10 local and mainland developers to enter the bid, and the response was good. However, the Lands Department announced that the site was invested by the far-reaching price of 24.45644 billion yuan, which is about 12% lower than the market lower limit. If it is the highest valuation, it is about 32% lower. The land that can be built in the area is only about 344,400 square meters. The land price per floor is about 7,100 yuan, which is only slightly higher than the other commercial land in the same district that was invested by Lifu International at the end of 2016. After the land price of No. 4 in the 4C area, it was more than 45%.
In the five Kai Tak commercial sites that the government has launched tenders since 2016, the exhibition only participates in the No. 5 area of the 4C area of the current bidding, and the bidding for this time. Therefore, under the influence of many major developers, The far-reaching exhibition is an upset bid.
Fang Wenchang, Director of Development of Real Estate Development, believes that the developers have lowered the bid price for the recent social turmoil and the Sino-US trade war. The company has won the bid for the “excellent price” and the land Adjacent to the sports park, there will be many international events and large-scale entertainment performances such as concerts. In addition, there are infrastructure advantages such as Route 6 and Shazhong Line, so it is very optimistic about the development prospects of this place. The company initially plans to build a Grade A office building and a five-star hotel, each accounting for about half of the floor, and will provide about 400 hotel rooms. The total investment of the project is expected to be about 4 billion yuan.
Low price due to immature business in the area
Li Jianhui, president of Zhongyuan Professional Services, said that the government has approved the land at a low price this time. It can be seen that the market has accepted the fact that Kai Tak’s commercial development is not yet mature, and it is not intended to reproduce the results of the flow label. Moreover, the recent continuous social turmoil and the low bid price also reflect that the developer’s bid is extremely cautious and conservative.
Lin Haowen, executive director of Knight Frank, believes that many developers have entered the bidding for this place. Although the developers still have confidence in the property market in Hong Kong, commercial land has always relied on commercial consumption support. The past two months have been rioting and Sino-US Under the influence of trade wars, and the office buildings and hotels built in this area cannot be sold off, the bids must be conservative.
He also estimated that the value of No. 4 in Area 4C, which will be closed next month, is only about 7.3 billion to 8.2 billion yuan, that is, the land price per floor is about 8,500 to 9,500 yuan.