HONG KONG: The Hong Kong government has announced the first sale of commercial land in the territory’s central business district in more than 20 years. The site, used as a multi-story car park in Murray Road, Central, is about 2,880m2, according to a government statement released on Thursday. The plot is valued at between HK$15.8 billion and HK$17 billion (US$2 million and US$2.2 billion), Colliers International executive director of valuation and advisory for Asia Vincent Cheung said. It is the the first commercial development site available in Central since 1996, Cheung said, adding that rents will set “a new indicator” for offices in the area.
The sale of the plot, near the Bank of China building and billionaire Li Ka-shing’s Cheung Kong Center, is slated for the first quarter of next year. It comes after some record-breaking deals in Hong Kong’s office market, driven by strong demand from Chinese companies. In July, Wheelock & Co sold One HarbourGate East Tower to Shenzhen-based Cheung Kei Group for HK$4.5 billion. Last year, Chinese developer China Evergrande Group and China Life Insurance Co bought office blocks in separate transactions worth a combined HK$18.35 billion.
The sale might attract attention given the lack of new supply and low prime-office vacancy rates in the area, Bloomberg Intelligence analyst Patrick Wong wrote in an e-mail. The potential high price could “stimulate” investment demand for office properties in Central and sale prices of existing offices in Central could rise further, he said. On the residential front, the government is projected to supply 19,460 private units in the fiscal year ending March, which is 8 percent above its target. That is the biggest supply since 2010, Hong Kong Secretary for Development Paul Chan told reporters on Thursday.
Hong Kong’s residential property prices have risen to record highs and sales volumes have surged even after the government raised stamp duty last month, defying previous forecasts that the measures would send transactions plunging by as much as 70 percent. Private housing prices last month reached the highest since data was first made available in 1979, the city’s rating and valuation department said yesterday.“The government will spare no effort in identifying additional suitable sites for development and closely monitor the market situation,” Chan said.
