Large Commercial Site In Causeway Bay Attracts 6 Bids
HONG KONG – A commercial site spanning 286,140 sq ft along Caroline Hill Road, the 1st commercial land parcel to be offered for sale in Causeway Bay in around 24 years, drew 6 bids on Friday, reported the South China Morning Post (SCMP) on Friday evening (7 May).
3 of the 6 bidders comprise Wheelock Properties, Asia’s biggest real estate investment trust Link REIT, and Hong Kong’s second largest property developer by value, CK Asset Holdings. Another bidder is Sun Hung Kai Properties (SHKP), the biggest developer in the Chinese territory.
The remaining 2 consist of joint ventures. One is a partnership between Chinachem Group and Causeway Bay’s biggest lessor Hysan Development. The last is a consortium consisting of Sino Land, Kerry Properties, CC Land Holdings, and Lifestyle International Holdings.
Their submitted prices were not disclosed, and the commercial site was not yet awarded.
According to Knight Frank’s Executive Director & Head of valuation and advisory in Hong Kong, Thomas Lam, “a plot of this size is rare in the area.” He also estimated that the land parcel could sell for roughly HK$17 billion. This is down from a prior estimate made in 2019 ranging from HK$24.7 billion to HK$27.9 billion.
Lam disclosed that the plot in Caroline Hill Road is the 1st commercial site offered for sale in Causeway Bay by the government since 1997.
Moreover, he revealed that the land is suitable for mixed-use projects with office space and retail units. Lam reckons that it can generate 1 million sq ft of gross floor area (GFA) and that the winning bidder could spend an overall investment of between HK$24 billion and HK$26 billion.
However, he noted that there are multiple requirements that will impact the winning bidder’s planning and costs. This is because the buyer will need to build a child care centre, a health centre for the district, and a public car park that can accommodate a minimum of 125 vehicles.
Furthermore, Lam believes that the COVID-19 situation in Hong Kong has stabilised recently, and in turn this will encourage real estate players to submit competitive bids for sites. But based on data from Jones Lang LaSalle (JLL), the office vacancy level in the Wan Chai-Causeway Bay area edged up from 8.6 percent in February to 9.0 percent in March 2021.
Meanwhile, a prime harbourfront commercial site in Central measuring over 500,000 sq ft is the most anticipated government land sale this year in Hong Kong, and its tender is poised to close in June 2021.