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Hong Kong property
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Wheelock wins Kennedy Town tender at lowest price for Hong Kong Island since 2002

  • The fact that the tender has not been withdrawn shows that the government is committed to increasing supply, executive at Centaline Surveyors says
  • Average price per square foot is over 25 per cent lower than price for a small parcel sold in the same district in November: Midland Surveyors

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The junction of Sai Ning Street and Victoria Road in Kennedy Town. Photo: Handout
Lam Ka-sing
The government’s first land tender of the financial year has fetched the lowest price for Hong Kong Island since June 2002 and is more than 25 per cent lower than prices seen in November, amid prospects for further interest rate increases and a plentiful supply of new housing.
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A subsidiary of Wheelock Properties won the tender for a site at the junction of Sai Ning Street and Victoria Road in Kennedy Town for HK$1.72 billion (US$219.86 million), according to the Lands Department. The plot is expected to yield about 450 flats, some with a sea view.

The site is currently occupied by a bus terminal, and the construction of a temporary terminal next to the site while the existing one on the plot is replaced by a new one during the construction of the project will prolong the development period.

“The average price per square foot at HK$7,071 is the lowest on Hong Kong Island since June 2002, which is likely to be related to the [plot’s] complex terms of land development, and the current uncertain economic environment,” said James Cheung, executive director at Centaline Surveyors. The development period of the project is nine years, which is longer than the six years of projects generally, and the risk is higher, Cheung added.

Rising interest rates are weighing on the sector. Hong Kong Monetary Authority CEO Eddie Yue Wai-man said last month that a cycle of rising interest rates was far from over and that the de facto central bank had only paused rate hikes after 10 straight increases in its base rate since March last year.
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“As a result of the interest rate hikes in the United States, interest rates are high and construction costs are rising,” Cheung said. And while mainland Chinese developers did not bid for the plot, local developers were very cautious in their bidding process, he added.

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