{"id":343311,"date":"2023-02-14T21:36:39","date_gmt":"2023-02-14T13:36:39","guid":{"rendered":"https:\/\/www.mingtiandi.com\/?p=343311"},"modified":"2023-02-14T21:36:39","modified_gmt":"2023-02-14T13:36:39","slug":"mtr-withdraws-tender-for-hong-kong-site","status":"publish","type":"post","link":"https:\/\/www.mingtiandi.com\/real-estate\/projects\/mtr-withdraws-tender-for-lantau-island-site-in-third-hong-kong-land-sale-fail-of-2023\/","title":{"rendered":"MTR Withdraws Tender for Lantau Island Site in Third Hong Kong Land Sale Fail of 2023"},"content":{"rendered":"
\"Oyster

The Oyster Bay site is the first phase of the project near the upcoming MTR station. (Source: Sing Tao)<\/p><\/div>\n

Hong Kong\u2019s MTR Corporation has ended a tender for a HK$10 billion ($1.27 billion) project in northern Lantau island without finding a buyer after the three bids received for the commercial and residential site fell short of the government-backed transport firm\u2019s expectations.<\/p>\n

The transit operator said in a statement<\/a> on Monday that it rejected the three bids submitted for the first phase of its Oyster Bay project, which can accommodate up to 1,900 new homes and a shopping centre right on top of an upcoming MTR station.<\/p>\n

\"\"<\/a><\/div>\n

The futile exercise marked the third failed land sale in Hong Kong so far this year, following the Urban Renewal Authority\u2019s rejection of the sole bid for a Kwun Tong site<\/a> earlier this month and the unsuccessful tender for a luxury residential site in the Stanley area<\/a> which was scratched after drawing four subpar bids.<\/p>\n

\u201cThe government overestimated the value of the tender site (Oyster Bay) and hence even the highest bid of developers was not accepted by the government,\u201d said Charles Chan, managing director of Savills\u2019 valuation and professional services division in Hong Kong. \u201cThere will be more abortive land sales if the government does not recognize the falling market trend.\u201d<\/p>\n

Misaligned Expectations<\/h3>\n

The tender for the Oyster Bay site, which closed on 8 February, drew bids from local real estate giants CK Asset, Sun Hung Kai Properties and Wheelock Properties, according to local news portal The Standard<\/a>.<\/p>\n

\"MTR

David Tang, MTR’s property and international business director<\/p><\/div>\n

Market analysts have valued the project at between HK$3.95 billion and HK$6.50 billion, or about HK$3,000 to HK$5,000 per square foot of its maximum gross floor area. The project is approved for development of up to 1.25 million square feet (116,130 square metres) of\u00a0 residential space and also includes a 67,400 square foot retail podium.<\/p>\n

For Alex Leung, senior director at CHFT Advisory, the project is currently worth not more than around HK$3,200 per square foot, which would put the overall development cost at around HK$9.5 billion, after taking into account payment of a HK$1.2 billion land premium to the MTR..<\/p>\n

Savills\u2019 Chan estimated the total development cost could potentially breach HK$10 billion, given the scale of the project, which forms part of a sprawling complex being built next to the Oyster Bay MTR station, which is set to be operational by 2030.<\/p>\n

Alkan Au, senior director of valuation advisory at JLL, said there is still a wide gap in price expectations between land owners, who have set a bar high based on an anticipated economic rebound following the reopening of the city\u2019s borders, and developers, who have grown more cautious in the face of rising borrowing costs.<\/p>\n

\"\"<\/a><\/p>\n

\u201cIt is not surprising that developers are still prudent in their biddings until the market has really come back in terms of improvement on the interest rate environment, sales velocity of new projects, consolidation of house prices,\u201d Au said.<\/p>\n

CHFT\u2019s Leung added that developers may also have been deterred by the quantity of residential sites the transit operator has in the pipeline in the Tung Chung area and the long time horizon before completion of the MTR\u2019s infrastructure in the area.<\/p>\n

\u201cThough the developer could sell the flats earlier (than the 2030 opening of the train station), it is not easy to market such a big project. It is a large-scale long-term investment,\u201d he added.<\/p>\n

MTR Corp said it will relaunch the Oyster Bay site in due course.<\/p>\n

Pessimistic Outlook<\/h3>\n

Chan said the string of failed government land sales this year signals continued pessimism among developers, which can be traced to rising interest rates, the increase in the number of new sites being made available by the government, economic challenges in mainland China and the ongoing conflict between China and the US.<\/p>\n

Earlier this month, the URA ended its tender exercise for the 275,500 square foot site in Kwun Tong after rejecting the sole bid, received from Sun Hung Kai, according to an account by The Standard<\/a>.<\/p>\n

\"\"<\/a><\/p>\n

The project dubbed Kwun Tong Town Centre Development Areas 4 and 5 can yield up to 2.2 million square feet of commercial space and is estimated to have a value of up to HK$13 billion, or about HK$6,000 per square foot of its maximum GFA, based on the news report.<\/p>\n

That failed sale came shortly after the Lands Department rejected bids submitted by CK Asset, Sun Hung Kai, K Wah International and a consortium of Sino Land and Great Eagle for a luxury residential site in Stanley last month.<\/p>\n

Analysts had estimated the Stanley project, which could yield 637 homes in the upscale residential neigbourhood, to be valued between HK$5.3 billion and HK$9.6 billion, or HK$11,000 to HK$20,000 per square foot.<\/p>\n","protected":false},"excerpt":{"rendered":"

Hong Kong\u2019s MTR Corporation has ended a tender for a HK$10 billion ($1.27 billion) project in northern Lantau island without finding a buyer after the three bids received for the commercial and residential site fell short of the government-backed transport… Read More>><\/a><\/p>\n","protected":false},"author":12201,"featured_media":310191,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3401],"tags":[5382,5359,694,5795,7404,5118,9141],"ppma_author":[8848],"authors":[{"term_id":8848,"user_id":12201,"is_guest":0,"slug":"beatrice-laforga","display_name":"Beatrice Laforga","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/d4be689d8f5a82939d685df6ef171fcb?s=96&d=mm&r=g","user_url":"","last_name":"Laforga","first_name":"Beatrice","description":""}],"_links":{"self":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/343311"}],"collection":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/users\/12201"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/comments?post=343311"}],"version-history":[{"count":0,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/343311\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media\/310191"}],"wp:attachment":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media?parent=343311"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/categories?post=343311"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/tags?post=343311"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/ppma_author?post=343311"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}