Developers May Shun Kwun Tong Town Centre Redevelopment’s Last Phase
HONG KONG – Experts said that due to a softening economy and elevated office vacancy levels in East Kowloon, fewer developers are expected to bid for the upcoming tender for the last phase of the mega redevelopment of Kwun Tong town centre, reported the South China Morning Post (SCMP) earlier this week.
Notably, Kwun Tong Town Centre Project is the biggest redevelopment project of the Urban Renewal Authority to date. The entire development involves five plots collectively measuring over 500,000 sq ft and has been undertaken in phases since 2007.
The project’s goal is to transform the old district into a “small Taikoo Shing”. Notably Taikoo Shing is a popular development in Quarry Bay undertaken by Swire Group that comprises office space, flats, a hotel and a mall.
However, market watchers don’t expect the Kwun Tong tender to draw many bids after the withdrawal of tenders for 3 commercial sites in the nearby Kai Tak Development area in 2019 and 2020.
CHFT Advisory and Appraisal’s Senior Director Alex Leung expect only 3 to 4 bids from major developers due to the “large and long-term investment” involved amidst weak market conditions.
“The market is no longer normal since the outbreak of Covid-19,” he explained.
Vincent Cheung, Managing Director of Vincorn Consulting and Appraisal, agrees. “Only the top-notch local developers would consider such a huge commercial project,” given that more projects are still to be launched and the current vacancy rate of commercial properties in East Kowloon stands at 14 percent to 15 percent, or the highest in Hong Kong.
Last week, Hong Kong’s Urban Renewal Authority asked parties to formally show their interest in participating in the Kwun Tong Town Centre Development Areas 4 and 5. The deadline for submitting expressions of interest (EOI) is on 7 September 2022.
The latest project involves an area spanning 275,502 sq ft. Upon completion, it will have a gross floor area (GFA) of 2.165 million sq ft.
Based on the Urban Renewal Authority’s application to the Town Planning Board in July, the development proposal includes an egg-shaped building, a block that is slightly larger than that, and a 60-storey commercial tower, which is the highest and biggest of them all. All three will be connected.