CK Asset Holdings, the property conglomerate chaired by Victor Li Tzar-kuoi, has won the tender for what could be Hong Kong’s most expensive railway development, requiring a total investment of up to HK$38 billion (US$4.8 billion) for the Wong Chuk Hang site.
MTR Corp awarded the tender for phase three of the plot next to the Wong Chuk Hang MTR station on Thursday, two days after the tender closed.
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CK Asset, which Li took over from his father Li Ka-shing formally in May, beat Hong Kong property giants including Sun Hung Kai Properties, Henderson Land Development, Chinachem Group and a consortium consisting of New World Development, Wheelock Properties, Sino Land, China Overseas Land & Investment and K Wah International to secure the site.
Grace Woo Chia-ching, executive director of CK Asset said the company was confident in the site’s potential for development.
“The railway development at the station, which is only two stations away from transport hub Admiralty Station, is the only remaining one on Hong Kong Island,” she said, adding that the company expected to complete the project by 2023.
Surveyors estimate the total investment cost for the parcel would be between HK$27 billion to HK$37.65 billion.
The site, which will yield a total gross floor area of 1.5 million sq ft, will be developed into four towers with 1,200 units and a shopping centre of 505,908 sq ft.
CK Asset is required to pay nearly HK$13 billion in land premium to the government as a one-time payment, the highest among railway development projects.
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Flats are expected to sell between HK$30,000 to HK$45,000 per sq ft.
Analysts said the move marked CK Asset’s accelerating land replenishment programme after a two-year absence in successfully acquiring a major site in Hong Kong.
“It is not surprising,” said Thomas Lam, senior director at Knight Frank, referring to CK Asset’s win. “As the developer has sold a lot of flats in recent years almost immediately after they are available, it is time to replenish its land bank.”
CK Assets sold 3,300 flats last year for a total consideration of HK$52.5 billion.
Raymond Cheng, head of Hong Kong and China research and property at CGS-CIMB Securities, said
CK Asset might have become even more optimistic on Hong Kong’s property market now.
“The recent [planned] redevelopment of Hutchison House and the winning of Wong Chuk Hang land suggest that they are [getting aggressive in their bids for] land in Hong Kong.”
The acquisition comes two months after the completion of the HK$40.2 billion sale of The Center in Central, the world’s costliest office tower.
CK Asset, the second largest Hong Kong developer by market capitalisation, owns just six million square feet of land bank for development in Hong Kong, according to its 2017 annual report. Sun Hung Kai Properties and Henderson Land by comparison hold 21.4 million sq ft and 14 million sq ft respectively.
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It was also the first land acquisition from the government after the developer won a mid-sized site for luxury residential development on Lai Ping Road, in Kau To Shan near Sha Tin for HK$1.95 billion in September 2016.
Lam said the developer is likely to continue to buy land in the world’s most unaffordable housing market, even if it is expensive.
“I believe the company will continue to buy if they can locate good and profitable opportunities.”