Wheelock outbids rivals in Lohas Park site tender as Hong Kong developers replenish land bank amid market weakness

By Martin Choi martin.choi@scmp.com / https://www.scmp.com/business/article/3049205/wheelock-outbids-rivals-lohas-park-site-tender-hong-kong-developers?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | February 11, 2020 6:16 PM SGT
Wheelock & Co has beaten eight competing bids in the tender for the latest phase of Lohas Park development in New Territories as Hong Kong developers continue to replenish their land bank after a slide in real estate prices.
The company won the bid to develop the 961,100 sq ft (89,290 sq m) plot in southeastern New Territories, according to a statement from MTR Corporation, the vendor of the site. The plot can accommodate up to 2,000 homes, making it the largest among the phases in Lohas Park in the past five years.
Other bidders were CK Asset Holdings, Henderson Land Development, Sun Hung Kai Properties, China Overseas Land & Investment, Chinachem Group and Sino Land, MTR said on Tuesday. New World Development and Empire Group submitted a joint bid while another bid was not revealed.
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A general view of Lohas Park development, which is the single largest residential community in Hong Kong when fully completed in 2025. Photo: Martin Chan alt=A general view of Lohas Park development, which is the single largest residential community in Hong Kong when fully completed in 2025. Photo: Martin Chan
"The winning developer has existing projects in the same district and has sufficient sales experience," said Thomas Lam, an executive director at real estate consultancy Knight Frank. "It has been difficult to buy land in recent years, so developers will need to replenish their land banks" even amid the coronavirus outbreak, he added.
Hong Kong's biggest developers have spent HK$110.1 billion buying up 17 parcels of land auctioned by the government since April last year, according to data published by the Lands Department, even as the city fell into its worst political crisis amid anti-government protests.
The new site in Lohas Park will be developed into small and medium-sized residential units, sitting on top of a shopping centre that is directly connected to the Lohas Park MTR station, Wheelock said.
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The cost of the land appears to be cheaper, possibly reflecting the impact of social unrest last year. This is based on the lower land premium of HK$2.725 billion, or HK$2,835 per sq ft as disclosed in the tender document published in December, about 10 per cent below the premium on the previous lot sold in April.
The bid has taken into account the impact of the outbreak of coronavirus, according to Stewart Leung, vice-chairman of Wheelock. Wheelock has multiple residential projects in the area, and sales performance in the past has been satisfactory, therefore it has confidence in the location, he added.
The latest win is Wheelock's fourth within the sprawling Lohas Park development. The entire development will be home to about 58,000 residents in 21,500 flats when fully completed in 2025, making it Hong Kong's single largest residential community.
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The proposed shopping centre will be helpful for future property sales and pricing, said Knight Frank's Lam. The small and medium-sized residential units can sell from HK$16,000 per sq ft after completion, he added. That is above the most-recent transaction of HK$12,012 pr sq ft in the same development.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
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