Hong Kong's new business hub at Kai Tak may fall years late as developers turn skittish

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/property/hong-kong-china/article/3016790/hong-kongs-new-business-hub-kai-tak-may-fall-years-late?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | July 2, 2019 11:51 AM SGT
The bold vision to transform the former Kai Tak airport site into a second major business hub in Kowloon East may have to be put on hold for a while, as confidence in the project has been dealt a blow after a local developer judged it too risky to proceed with the purchase of a HK$11.1 billion (US$1.42 billion) site, according to industry experts.
The government may opt to defer the sale of some commercial sites at the city's former airport by up to two years until sentiment improves, a delay that would have a domino effect upon the completion cycle for some commercial buildings.
"If the government really is not sure about next year and they defer more, there is a potential they change [the sales schedule], especially on the runway side," said Hannah Jeong, head of valuation and advisory at Colliers International.
On June 11, Goldin Financial Holdings rescinded its bid for 4C Site 4, forfeiting its HK$25 million deposit, citing "social contradiction and economic instability".
The failed land sale, along with slower-than-expected development of an underground subway line linking the Kai Tak area, along with planning delays for a monorail system, were seen as dragging down interest for the remaining commercial sites.
In the 2011-12 Policy Address, the Hong Kong government revealed a plan to transform an area that comprises Kai Tak, as well as part of Kowloon Bay and Kwun Tong into the city's second core business district.
In March, the government said it planned to sell five commercial parcels at Kai Tak, comprising 5.53 million square feet of gross floor area during the coming year.
On Friday, the government said only one site forfeited by Goldin Financial would go up for tender during July to September. The site was won by Goldin during a tender in May, although the parcel was originally scheduled for sale in the prior financial year.
If the government sticks to its land tender schedule, the five parcels scheduled for the 2019 financial...