This Hong Kong car park could fetch up to HKD22bn

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Only a few takers from the mainland

Traffic in Kowloon, Hong Kong. Kit Sra/Shutterstock

A tender for a land parcel in Hong Kong’s major business district closed last week with bids expected to make it the Chinese SAR’s most expensive yet, South China Morning Post reported.

However, only nine bids came through Friday noon for the parcel, home to a popular five-storey public car park along Murray Road in Central district, the Lands Department reported.

Mainland developers largely ignored the bidding as Beijing continues its clampdown on capital flows into the Chinese SAR and abroad.

Surveyors have estimated the site to be worth between HKD15.7 billion (USD2 billion) and HKD22 billion or HKD35,000 and HKD48,000 per square feet. The first grade-A commercial parcel in downtown Central to be sold by the government in two decades, the site could yield a 30-storey office tower with 450,996 sq. ft. of gross floor area.

The tepid response was “out of our expectations,” Vincent Cheung Kiu-cho, Colliers Hong Kong deputy managing director for Asia valuation, told the Post. “China’s capital control may be one of the reasons as the total investment cost of the site could go up to HKD28 billion including construction cost.”

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Of the nine bidders, seven were based in Hong Kong: Cheung Kong Property (Holdings), Chinese Estates Holdings, Henderson Land Development Co, Nan Fung Development, Sun Hung Kai Properties, and Wheelock & Co. Shimao Property Holdings and Chongqing-based CC Land Holdings represented mainland developers, while one bidder has not been identified.

“Without mainland buyers aggressively bidding, it will be difficult to achieve some of the eye-popping prices that were being flaunted,” said Denis Ma, head of research at Jones Lang LaSalle Hong Kong. “This may potentially open the door for local developers, who’ve been adopting a more pragmatic approach toward their bidding strategies, to sweep in and win the site.”

Although the site is designated for office use, the winning developer will still be required to include a public car park with 102 parking spaces for cars and 69 spaces for motorcycles, the Murray Road tender document showed.

Motorists bemoaned the loss of the parking space, which has grown increasingly scarce even as traffic congestion and environmental degradation restrict car use in Hong Kong. The number of parking spaces for private cars in the city stood at 662,000 in 2016.

Update: Henderson Land has won the bid for the site at HKD23.3 billion (USD3 billion), Lands Department officials announced Tuesday.

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