Plot of commercial land at Kai Tak, Hong Kong's former airport, withdrawn from government tender after failing to attract high enough bids

By Pearl Liu / | September 26, 2019 10:38 AM SGT
A plot of commercial land on the runway of Hong Kong's former international airport has been withdrawn from sale after it failed to attract a high enough bid, the Lands Department said on Wednesday.
The government has rejected all five bids received for Area 4C Site 4 at Kai Tak because "the tendered premiums did not meet the government's reserve price for the site," the authority said.
The waterfront site with a gross floor area of 863,000 square feet is earmarked for development of a hotel, offices and shopping centres.
The Lands Department said in a statement that it would not speculate about why the bids from CK Asset Holdings, Chinese Estates Holdings, Great Eagle Holdings, Sun Hung Kai Properties and Sino Land had fallen short.
But the apparent lack of appetite for the site comes as the crippling social unrest that has engulfed Hong Kong, devastating tourist numbers and tarnishing its global reputation, enters a 17th week and shows no sign of abating.
"Why would developers put in high bids now, when the hospitality and retail sectors are witnessing such a large slump?" said Vincent Cheung, managing director of Vincorn Consulting and Appraisal. "The government is expecting too much and not taking into consideration the current situation."
He said the failure to find a buyer might have a knock-on effect on the market.
"The withdrawal will create a vicious circle. We may see more scrapped land sales later as more investors turn skeptical towards the market when they see even big developers are getting cold feet," he said.
Area 4C Site 4 at Kai Tak is proving problematic for the government.
Having secured the site for HK$11.1 billion (US$1.42 billion) on May 15, Goldin Financial Holdings forfeited a HK$25 million deposit and walked away from the deal less than a month later, citing "social contradictions".
It was not clear what the developer meant by this, but its decision to abandon the transaction came two days after a million people took to the streets to oppose the controversial extradition...