Sun Hung Kai Awarded Commercial Site In West Kowloon
HONG KONG – Winner Harvest Ltd, a subsidiary of major developer Sun Hung Kai Properties, has been awarded a mixed-use commercial site spanning 699,654 sq ft in West Kowloon, reported the South China Morning Post (SCMP) on Tuesday evening (22 November, SGT).
Sun Hung Kai was the sole bidder for the Artist Square Tower (AST) Project, which will consist of 3 buildings containing office space, retail units, and entertainment attractions in the 40ha district touted as the premier arts hub of Hong Kong, announced the West Kowloon Cultural District Authority on Tuesday evening.
“SHKP was awarded with the right to develop and operate the AST Project for a period of about 47 years under a Build-Operate-Transfer (BOT) arrangement. As such, the developer will be responsible for the design, construction, financing, marketing, leasing, management, operation and maintenance of the project,” stated the authority.
“The authority considers the tender price offered by SHKP is commensurate with the market level and accepted the tender bid.”
While the commercial site was projected to fetch up to HK$10.5 billion (US$1.3 billion), the authority refused to reveal more details about the tender, including the submitted bid.
Also, there were no other bidders for the AST project amidst challenging market conditions, with the city’s commercial property market reeling from rising interest rates, a slump in the local bourse, and the ongoing impact from the COVID-19 pandemic.
Market watchers had identified Sun Hung Kai as a would-be bidder for the project, after it had won another commercial site located above the West Kowloon terminus.
Notably, this marks the 2nd time that the authority launched the tender for AST Project. The first attempt in November 2021 was called off after the received offers were lower than the reserve price.
In the latest tender, the authority extended the BOT tenure to 47 years, but it was still lower than the standard 50-year granted to winning bidders in other land tenders in the Chinese territory.
Property experts think Sun Hung Kai may have been enticed to take part in the tender as the BOT tenure was extended. The site is also near the Hong Kong West Kowloon Station, the terminus and only station on the Hong Kong part of the Guangzhou-Shenzhen-Hong Kong Express Rail Link. In addition, the developer owns the upcoming commercial complex above the terminus.
“SHKP is one of the major owners in West Kowloon as they own the International Commerce Centre (ICC) as well as the to-be-completed commercial complex on top of the high-speed train terminus,” noted Vincorn Consulting and Appraisal’s Managing Director Vincent Cheung.
“They are familiar with the leasing conditions and the potential renters. Their successful bidding for this asset can enhance their commercial synergy in terms of rental setting and adjustment and tenant mix in the district,” he added.