CK Asset Holdings has added another site to its land bank. The property arm of Li Ka-shing’s empire has been awarded a site zoned for residential development at the city’s former Kai Tak airport for the relative bargain price of HK$8.7 billion ($1.1 billion).
The successful bid equated to HK$6,138 per square foot, which was characterized as being “very reasonable” by CK Assets’ Executive Director Grace Woo.
“Strategically located above the Song Wong Toi MTR station and with a planned underground shopping street connecting the traditional areas of Kowloon City and the Kai Tak MTR Station, the small and medium-sized residential units are expected to be very popular upon completion,” she said.
Other bidders for the site included property heavyweights like Lee Shau Kee’s Henderson Land and Peter Woo’s Wheelock Properties as well as a consortium made up of Lui Che Woo’s K. Wah International, the Ng family’s Sino Land and the Lo family’s Great Eagle.
“It is surely lower than market expectations before the announcement of the result and the closing of the tender,” says Cyrus Fong, senior director for valuation and advisory at Knight Frank.
“Although, on one hand, this should be mainly due to the large scale of this site as well as the market uncertainty including the interest rate hike, on the other, there are several special conditions for the developer to fulfill when they develop the site ,” he says.
With a gross floor area of 1.42 million square feet, the whole site consists of 3 individual lots, and there are limitations on the buildable area for each of the lots. The conditions of the tender also require CK Asset to build an elderly home and child care units as part of the project.
CK Asset has been replenishing its land reserves at a time when Hong Kong’s residential market has been hit by slumping sales and a growing supply of new housing coming into the market.
The property giant made four acquisitions through government tenders this year, the latest of which came less than a week ago when it won a tender for a residential site in Sai Ying Pun with a bid of HK$1.16 billion. CK Asset’s other acquisitions include a residential site in Tuen Mun for HK$4.6 billion in October and another plot in To Kwa Wan for HK$5.99 billion in March.
The Kai Tak site failed to sell in 2020 after none of the bids met its reserve price, so the government rezoned it from commercial to residential use.