The close of 2020 saw a record-breaking land sale on the Victoria Peak, with a Wharf Holdings Ltd. led consortium paying US$1.5 billion for a plot that became the most expensive residential site sold by government tender. This bid was higher than market value and reflects the confidence of developers in the sector's outlook, especially for luxury housing.
This sale was preceded by the Hong Kong authorities boosting the supply of residential plots available in the quarterly land sale programme for the fourth quarter of the financial year (January to March 2021). Secretary of Development, Michael Wong, announced that the Lands Department will make three residential sites available in this period which have the potential of creating 2,240 units. Despite the record land sale, the addition of the new plots shouldn’t be viewed skeptically; the sites are very much a part of the government’s attempt to address Hong Kong’s housing shortage. There is a well-established fundamental challenge around land and housing, which is intertwined with affordability.
As we close out the end of the financial year, the government has successfully sold two of the three residential sites put up for tender, Kai Tak Area 4E Site 2 and Nos. 9 & 11 Mansfield Road, The Peak, with Kwu Tung North New Development Area still under consideration.
|Property||Kai Tak Area 4E Site 2, Kai Tak|
|Lot Number||New Kowloon Inland Lot No. 6604|
|Transaction Date||17 February 2021|
|Maximum GFA||648,143 sq. ft.|
|AV (on GFA)||HK$15,861 per sq. ft.|
|Successful Bidder||City Champion Investment Limited (parent company: CK Asset Holdings Limited)|
This sale strengthens market sentiment around the residential sector. There is clear optimism from local developers with this site being ear marked for several residential high-rise buildings, with supplementary low rise commercial units. The final developed property will also benefit from the fact it faces Victoria Harbour and has a good layout.
|Property||Nos. 9 & 11 Mansfield Road, The Peak|
|Lot Number||Rural Building Lot No. 1222|
|Transaction Date||9 February 2021|
|Maximum GFA||144,970 sq. ft.|
|AV (on GFA)||HKD$50,011 per sq. ft.|
|Successful Bidder||Active Pursuit Limited (parent companies: Wharf Development Limited, Boswell Holdings Ltd, Cheung Chung Kiu, Chan Hoi Wan and Lau Luen Hung, Thomas)|
The sale of Nos. 9 & 11 Mansfield Road follows the sale of Nos. 2,4,6 & 8 Mansfield Road on 23 December 2020 (AV of HK$46,272 per sq. ft. on GFA). These two separate sales were completed after them being previously cancelled on 16 October 2018 due to the bids not reaching the reserve price set by the Lands Department. This demonstrates a revived appetite in the market for luxury assets with this site going to be used to develop a luxury residential complex.