Hong Kong commercial land sold at request price
Hong Kong real estate company Nan Fung Development Limited set a lump sum land sales record on Wednesday by buying a commercial plot for HK$24.6 billion ($3.16 billion), the Lands Department said, after the previous record of HK$23.3 billion was set this month.
The company, under Nan Fung Group, beat 11 other firms to snap up the land with a maximum gross floor area of more than 1.91 million square foot in the developing Kai Tak district, home to the city’s former airport and overlooking Victoria Harbour.
Hong Kong saw an influx of mainland Chinese capital snapping up about 30 percent of land sold for development in 2015-2016, pushing prices higher as land supply remains tight.
The latest deal beat expectations by 20 percent, three analysts said. It tops the lump sum record set by Henderson Land Development when it bought a commercial site in Hong Kong’s central business district two weeks ago.
In terms of price per square foot, Henderson’s purchase still held the record at about HK$50,000, compared to about HK$13,000 paid by Nan Fung at the Kai Tak site, said Denis Ma, research head at property consultancy JLL Hong Kong.
“The price is a bit of a surprise … but it represents a very rare opportunity in Hong Kong when developers can bid for a large-scale shopping mall project,” said Charles Chan, valuation and professional services managing director at Savills Hong Kong.
Most mainland Chinese developers prefer residential land. Chinese conglomerate HNA Group shone a spotlight on the Kai Tak district by paying heavily for four residential land sites there.
The latest sale came less than a month after Hong Kong authorities announced restrictions that included limiting the amount banks can lend developers.
JLL’s Ma said the restrictions, probably aimed at mainland Chinese developers and smaller local firms, did not seem to be reining in prices yet. “If you look at this result, it didn’t seem to have much of an impact at this point,” he said.