Chinachem Buys Commercial Site Near HK Airport At Bargain Price
HONG KONG – Chinachem bagged its 2nd commercial site via government land sale in nearly a year when it secured land close to Hong Kong’s international airport last week at a good price amidst a lukewarm property development market, reported Mingtiandi on Sunday noon (3 April, SGT).
The Hong Kong-listed property developer trumped 4 other rivals to win a 132,773 sq ft plot that can generate up to 1.3 million sq ft of commercial space on Lantau Island’s Tung Chung area for HK$2.78 billion ($350 million).
However, the price is below most analyst forecasts. “Given the developer will have high flexibility to use the land for data centre and office or retail, our firm expected the price could be between HK$4.0 and HK$4.4 billion,” said Alex Leung, senior director at local surveying firm CHFT Advisory and Appraisal Limited.
The lower selling price comes as developers in the Chinese territory showed limited interest for a commercial development close to the city’s international airport, which has been disused because of Hong Kong’s draconian quarantine policies and flight bans.
Chinachem’s top executives think its investment in Tung Chung Town Lot 45 close to the upcoming Tung Chung East MTR Station will benefit from the authorities’ development plans for the newly reclaimed Tung Chung New Town Extension, which is expected to be finished by the end of 2023.
“Tung Chung East will be developed into a new town by the government in line with its Tung Chung New Town expansion plans,” stated Chinachem Chief Executive Donald Choi.
“The site is also adjacent to the Hong Kong-Zhuhai-Macao Bridge and Tuen Mun Chek Lap Kok Tunnel, enjoying the advantage of excellent connectivity with Guangdong province and Macau. Given these factors, we are confident about this project and plan to develop shopping malls, offices, and a data centre.”
Chinachem is forking out about HK$2,202 psf for the Lantau Island commercial plot, as compared to a pre-tender valuation range of HK$2,200 to HK$4,000 psf estimated by a property consultancy. The site also qualified for development on a strata title basis and is expected to be linked to the Tung Chung East MTR Station via a footbridge.
Previously, the Tung Chung plot was initially put up for sale by the government in 2020, but the tender was withdrawn in October of the same year after all 3 bids submitted failed to meet the reserve price set by the authorities.
Thereafter, Hong Kong’s Lands Department revised the terms of the tender to increase the site’s attractiveness. These include removing the limit on office use, as the previous tender had only permitted a cap of 91 percent for office space.
The Tung Chung plot is the 2nd commercial site Chinachem bagged from the Hong Kong government in nearly a year. Last May, the developer and its joint venture partner Hysan Development purchased the secure a Causeway Bay commercial site for HK$19.8 billion (US$2.6 billion), with Chinachem holding a 40 percent stake in the joint venture.
