{"id":341796,"date":"2023-01-15T16:56:25","date_gmt":"2023-01-15T08:56:25","guid":{"rendered":"https:\/\/www.mingtiandi.com\/?p=341796"},"modified":"2023-01-15T16:56:25","modified_gmt":"2023-01-15T08:56:25","slug":"hong-kong-land-sale-fails-as-bids-fall-short-of-target","status":"publish","type":"post","link":"https:\/\/www.mingtiandi.com\/real-estate\/projects\/hong-kong-land-sale-fails-as-bids-fall-short-of-target\/","title":{"rendered":"Stanley Land Sale Fails as Four Bidders Fall Short of HK Government\u2019s Target"},"content":{"rendered":"
\"\"

Developers vying for a rare Stanley site encountered some rocky shoals (Getty Images)<\/p><\/div>\n

The tender for Hong Kong\u2019s first residential plot of 2023 was withdrawn on Tuesday<\/a>, as offers from four bidders for a luxury site in the Stanley area failed to reach the government\u2019s expectations after analysts had predicted it might sell for anywhere from HK$5.3 billion to HK$9.6 billion ($680 million to $1.2 billion).<\/p>\n

The failed tender for the plot, which could yield 637 homes in the wealthy haven on the south side of Hong Kong Island, came as none of the four bidders \u2014 confirmed by the Lands Department as Sun Hung Kai Properties, CK Asset Holdings, K Wah International and a consortium of Sino Land and Great Eagle \u2014 was prepared to meet the government\u2019s requirements in the midst of a softening housing market.<\/p>\n

\u201cDevelopers like the site but they won\u2019t be aggressive to stump up huge sums for it, they are prudent and they want a bargain before the market bottoms out,\u201d said Alex Leung, senior director at CHFT Advisory. \u201cThe offer from the four bidders could have hugely undershot the reserve price.\u201d<\/p>\n

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

Despite Stanley not having seen any sales of new land since 2016, the failed auction of this sizeable chunk in the seaside town shows that the high-end segment is vulnerable to the moribund market performance. The city\u2019s average prices and transactions have been trending down in recent months.<\/p>\n

Hong Kong Financial Secretary Paul Chan said Wednesday that overall home prices had slid by 13 percent <\/a>in the first 11 months of 2022. Data from the government\u2019s Land Registry indicated that the city saw just 45,050 home transactions in 2022<\/a>, compared with 2021\u2019s 74,297, marking an all-time low since the government started tallying such purchases in 1996.<\/p>\n

Waterfront Flop<\/h3>\n

The residential site \u2014 Lot 1204 on Stanley\u2019s Cape Road \u2014 measures 257,260 square feet (23,900 square metres) and can be developed into as much as 480,236 square feet of built area overlooking the South China Sea from the southeastern tip of Hong Kong Island.<\/p>\n

\"Paul

Hong Kong Finance Minister Paul Chan may have been surprised by some lowball bids (Getty Images)<\/p><\/div>\n

The site is within walking distance of major shopping and community amenities and a public transport interchange in central Stanley, as well as popular beaches. As a condition of the tender, the winning bidder would have had to develop a 150-bed elderly care centre on the site, plus other community facilities at the bidder\u2019s own expense.<\/p>\n

The valuation of the site was estimated at HK$5.3 billion to HK$9.6 billion, or HK$11,000 to HK$20,000 per square foot, before the tender closed on 6 January \u2014 much lower than the upbeat estimations of HK$13 billion to HK$18.5 billion when the government announced details of the sale plan last September.<\/p>\n

The drop is a gauge of how tepid the city\u2019s home market has become<\/a>, especially in the final quarter of 2022. JLL predicted in its latest report that Hong Kong\u2019s piled-up new housing supply of 79,000 existing units and those being built would take 5.4 years to digest at the current sales velocity.<\/p>\n

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

The unsuccessful tender was still a surprise, though. Previous consensus was that the Hong Kong government would press ahead with land sales despite the market downturn and that developers could expect to snag a bargain, as seen in recent transactions.<\/p>\n

CK Asset in December was awarded a Kai Tak site for HK$8.7 billion<\/a>, 23 percent below the bottom end of market expectations.<\/p>\n

Rare Opportunity<\/h3>\n

Upon submitting K Wah\u2019s bid for the Stanley site last week, an executive was quoted by Hong Kong media as saying that the plot was \u201crare in size and location\u201d and that Stanley and the broader Southern District had not seen any large luxury developments for many years, suggesting that developers would see potential \u2014 especially when valuations had dropped to more reasonable levels.<\/p>\n

The failed sale could be a test case of the limits of the government\u2019s willingness to sell land before a turnaround comes. CHFT Advisory\u2019s Leung added that bidders for the Stanley site, encouraged by previous sales when plots were sold with substantial knockdowns off market valuations, may have failed to anticipate a fresh change in the government\u2019s attitude.<\/p>\n

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

To quell speculation that the government has changed land sales criteria, the Lands Department said it would not sell a plot<\/a> if no bid reached the reserve price determined by its professional valuers on the day the tender is closed, in order to protect public revenue.<\/p>\n

Finance chief Chan also explained that the government had already taken into account the prevailing market sentiments when the reserve price was set.<\/p>\n

The Lands Department said in its statement that it would roll out the plot again at an appropriate time, which was echoed by Chan in his remarks when meeting the press on Wednesday.<\/p>\n","protected":false},"excerpt":{"rendered":"

The tender for Hong Kong\u2019s first residential plot of 2023 was withdrawn on Tuesday, as offers from four bidders for a luxury site in the Stanley area failed to reach the government\u2019s expectations after analysts had predicted it might sell… Read More>><\/a><\/p>\n","protected":false},"author":553,"featured_media":341830,"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":[5382,694,5795,5224],"ppma_author":[8838],"authors":[{"term_id":8838,"user_id":553,"is_guest":0,"slug":"mingtiandi-team","display_name":"Mingtiandi Team","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/2364918d8f7f71133487eb6f62e68fdf?s=96&d=mm&r=g","user_url":"","last_name":"Staff","first_name":"Mingtiandi","description":""}],"_links":{"self":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/341796"}],"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\/553"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/comments?post=341796"}],"version-history":[{"count":0,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/341796\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media\/341830"}],"wp:attachment":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media?parent=341796"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/categories?post=341796"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/tags?post=341796"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/ppma_author?post=341796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}