A redevelopment project in Hong Kong’s Kwun Tong district has been withdrawn from auction by the government after it failed to attract the minimum price of HK$8 billion (US$1.03 billion), Ming Pao Daily reported Wednesday.
The Urban Renewal Authority (URA) invited 10 developers to participate in the tender for the Kwun Tong Town Centre redevelopment but only four submitted bids, none of which met the minimum threshold.
The price was out of reach of mid-sized developers, the report said.
The failure added pressure to the government as it tries to build 18,000 flats this year.
It had expected to provide 1,700 flats from the redevelopment project which would put it more than halfway through to its the target for the three months to June
The URA will revise the bid terms in two weeks and allow the 10 developers to re-submit their bids in the next four weeks. The URA is expected to make a decision by the end of September, according to Sing Tao Daily.
Changes to the bid terms may be made after some developers expressed concern about potential construction delays and budget overruns.
Also, the URA may allow the winning developers to make changes to meet demand for smaller units.
Despite the setback, the URA said the target to provide 1,700 flats from the project in 2019 and 2020 is unchanged.
Stewart Leung, chairman of Wheelock and Co. Ltd. (00020.HK), said the company will study the revised terms and decide whether to join the bid, Ming Pao said.
And Justin Chui, executive director of Cheung Kong (Holdings) Ltd. (00001.HK), said his company will participate in new bidding if the revised terms are acceptable, the report said.
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