Kerry Properties secures Hong Kong’s latest residential plot for US$177 million

Hong Kong-based Kerry Properties has won a tender for a residential plot in Shau Kei Wan for HK$1.38 billion (US$177 million), which drew heavy bidding interest from both mainland Chinese and local developers. Kerry beat seven other bidders for a 50-year grant for the 1,349-square-metre (14,523 sq ft) parcel in the Eastern district, the Lands Department said on Monday. The plot was expected to provide a total gross floor area of over 130,000 sq ft, yielding around 300 residential units, according to Kerry. “We are delighted that Kerry Properties has successfully secured the site at Shau Kei Wan Main Street East,” said Calvin Tong, director and general manager for Hong Kong at Kerry Properties. The site benefits from strong transport connectivity, comprehensive lifestyle facilities and a limited supply of new residential developments in the area, he added. The company said it planned to deliver a “high-quality project with a strong focus on sustainable development and integration with the local community, bringing new vibrancy to Shau Kei Wan and reinforcing the group’s presence in Hong Kong”. Hong Kong developers Sun Hung Kai Properties, Kam Wah Investment, Ever Maple and K. Wah International Holdings submitted individual bids, while Sino Land and Great Eagle Holdings made a joint offer. Mainland developers China Overseas Land and China Merchants Land submitted separate bids. Mainland developers’ bids highlight their increased participation in Hong Kong’s land sale programme following state-owned China Overseas Land’s successful tender for a 33,712 sq ft residential plot in Kowloon East for HK$1.8 billion on February 10. Since the start of the year, the government has held three successful rounds of land tenders. In January, a joint venture between Sino Land and Great Eagle Holdings won a 41,226 sq ft site in Jordan Valley for HK$1.61 billion. “The higher-than-expected price for the Shau Kei Wan Main Street East site reflects developers’ positive outlook about the property market over the next few years,” said Cyrus Fong, executive director and head of valuation and advisory for Greater China at Knight Frank. As the plot was located on Hong Kong Island, Fong said the aggressive bidding was to be expected. Fong added that the project’s units were likely to consist of small to medium-sized flats with prices potentially reaching at least HK$25,000 per square foot. CBRE said the size of the plot meant it was ideal for a boutique development targeting end users and investors seeking access to Hong Kong Island East. “Its proximity to Shau Kei Wan MTR station, established schools and retail clusters supports strong absorption potential for compact to mid-sized units,” it said in an earlier statement. “Recent improvements in overall market sentiment, coupled with strong sales performance of new residential launches, have encouraged developers to actively replenish their land banks,” the property consultancy said. “The latest government land tenders have seen healthy participation and transaction prices exceeding initial market expectations, signalling a clear rebound in confidence.”