It is said that the local residential property market would not peak without Sino Land bidding up government land.
This is a myth, of course, or is it?
On Wednesday the real estate giant chaired by Singaporean Robert Ng Chee Siong led a consortium that won a waterfront site in Cheung Sha Wan by bidding HK$17.28 billion, making it the most expensive residential plot in Hong Kong.
The price dwarfed a record set by mainland property firms Logan Property and KWG Property, which won another waterfront site in Ap Liu Chau for HK$16.8 billion in February.
Sino Land also set the record for the most expensive land over a 20-year period when it won a tender in Siu Sai Wan for HK$11.8 billion in 1997.
It marked the highest degree of confidence in Hong Kong’s real estate market, although Ng’s group didn’t make a profit on the project.
That’s because local property prices were soon halved by the Asian financial crisis. Had it not been for the government’s decision to relax the plot ratio for Island Resort to enable the group to build a 60-storey building on the site, Sino Land would have lost money in the project.
I remember this episode very well because I lived there for nine years.
And so it’s time again for the blue-chip property firm known for its aggressiveness in land auctions to show its abiding confidence in the property market by taking the West Kowloon site with a market-beating price.
The consortium by Sino Land, Shimao Property Holdings, Wheelock Properties, K Wah International and SEA Holdings beat 10 other developers to secure the plot, which has a total gross floor area of 986,789 square feet.
At the price of HK$17,500 psf, the developers are paying the prevailing market price for the plot that could potentially supply more than 1,200 housing units for over HK$30,000 psf – if they were to make a handsome profit.
Daryl Ng Win-kong, deputy chairman of Sino Group, said the plot commands a coveted urban waterfront location with the West Kowloon Cultural District and West Kowloon Terminus in the vicinity.
The consortium plans to build a premium residential development at the site to make the most of the panoramic harbour views, complete with green architectural features and smart home designs.
Several times over the years, Sino paid incredible land premiums only to see the market collapse for one reason or another.
But this time around things may be different because we now have a lot of Sino Lands, if we consider the staggering prices that mainland property companies paid in Hong Kong land auctions over the past few years.
Fair to say that this new Sino record would not hold as long as the last time.
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