Kowloon East site attracts nine bids as Hong Kong housing outlook brightens

Hong Kong’s tender for a 3,132 square metre (33,712 sq ft) residential plot in Ngau Tau Kok, Kowloon East, has drawn nine bids, according to the Development Bureau. The site was estimated to be worth as much as HK$1.55 billion (US$198 million), according to real estate services provider CBRE. Sun Hung Kai Properties, Henderson Land Development and CK Asset Holdings submitted bids individually, while Sino Land and Great Eagle Holdings made a joint offer, the groups confirmed separately on Friday. The residential site on Choi Ha Road, close to the Kowloon Bay MTR station and the private housing estate Amoy Gardens, was expected to yield 470 residential units, according to a previous government statement. “With comprehensive surrounding amenities, the site has a certain appeal to end-user housing demand,” said Eddie Tsui, senior director for valuation and advisory services at CBRE Hong Kong. “Amid an improving residential market sentiment, developers are expected to show relatively active interest in the tender. “Considering the site’s locational advantages, prevailing market conditions and development risks, the site’s reasonable land value is estimated to range between HK$1.3 billion and HK$1.55 billion, equivalent to around HK$4,400 to HK$5,100 per square foot of accommodation value.” The renewed interest of developers in land sales comes amid a brighter outlook for the residential segment. Lived-in home prices last year jumped 3.25 per cent, the first annual increase since 2021, when prices climbed 3.45 per cent. Ricacorp Properties has forecast home prices to rise by 6 to 8 per cent, while CBRE has estimated a more moderate increase of 3 to 5 per cent. The maximum permissible residential gross floor area for the site is about 252,800 sq ft, with the total gross floor area potentially increasing to 303,400 sq ft if retail or commercial elements are incorporated, Tsui said. The site was originally zoned for government, institution and community use before being rezoned for residential purposes. Development would involve demolition of existing structures such as an electricity substation and former school buildings, and may involve asbestos risks. “This requires developers to allow for additional time and costs for specialised handling, which could have a modest impact on the development timeline and project returns,” Tsui said. In January, a joint venture between Sino Land and Great Eagle Holdings won a government residential site tender in Kowloon for HK$1.61 billion, outbidding major developers, as the city’s housing market showed signs of stabilising. The purchase of the 41,226 sq ft site, which could yield 570 units, underscored the joint venture’s confidence in Hong Kong’s long-term development prospects, according to Sino Land. Sino Land owns 85 per cent of the joint venture, while Great Eagle owns 15 per cent.