The West Kowloon Cultural District Authority (hereinafter referred to as the Authority) held a tender for the West Kowloon Commercial Development Project Art Plaza Building in November last year, and closed the tender in February this year, receiving at least 4 tenders.
However, more than four months after the closing of the tender, the Authority announced that it would cancel the bidding process for the project and will launch an optimized version, which will significantly increase the development and operating rights from 34 years to 48 years.
A new round of bidding process is expected to resume within this year.
Authority announces cancellation of tender more than four months after tender closing
Gan Jinshi, deputy chief executive (regional development) of the West Kowloon Cultural District Authority, said that the cancellation of the bidding process for the Art Plaza Building project was mainly due to the adjustment of the terms of the project after listening to the developers' opinions. The construction, operation and handover of the project (Build –operate-transfer, BOT) will increase from 34 years to 48 years (until 2070).
The parking space period of the project has also been adjusted from the original 10-year period to 48 years, which is synchronized with the operating rights to cooperate with the development of the winning consortium.
Gan Jinshi: Optimizing the plan is beneficial to short-term cash flow
As for whether the cancellation of the project bidding means that the bid has been lost, Gan Jinshi said that although no bids will be accepted this time, he emphasizes that it is not a lost bid, but an optimization of the terms. He also points out that the new terms will make better use of land resources, which will be beneficial to the entire West Kowloon Cultural District. Good news.
She explained that the operation period of the project is increased by 14 years, and the bid of the consortium will also increase accordingly, which will have a positive effect on the short-term cash flow of the Authority, and bluntly, it will benefit more. Therefore, she is not disappointed with the cancellation of the project bidding, but thinks it is Definitely something worth doing.
The estimated completion date and the time for obtaining the Occupation Certificate will not be affected
She also added that although the bidding process was cancelled, the expected completion date of the project and the date of obtaining the occupancy certificate have not been delayed. Therefore, it is believed that there will be no negative impact on the Authority, and it will not affect the rental income.
However, she revealed that the adjustment of the operating period from 34 years to 48 years will involve the modification of the land lease, so the actual re-launch time is unknown for the time being, but it is estimated that the modification will be completed and the tendering will be re-launched within this year.
As for the details of the terms and conditions of the earlier tender, such as the income sharing ratio and the payment of fixed rent in two instalments, it is unknown whether there will be any changes.
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Receive comments from the developer before closing the tender and hope to adjust the details
Regarding the cancellation of the tender for the project, Gan Jinshi pointed out that the consortium that had won the tender earlier and had requested the tender documents of the project will be notified within a few days.
Regarding the number of tenders received in the previous tender, she said that there was a confidentiality agreement and it was inconvenient to disclose, but she had received comments from the developer before the tender closing and hoped to adjust the details.
As for other businesses in the West Kowloon Cultural District, according to information from the Authority, the West Kowloon Cultural District Authority Building, where the Authority's headquarters is located, was leased by two major tenants in April this year, and the occupancy rate of the leasable space has reached 100%.
In the fourth quarter of 2021, the average monthly revenue of retail, dining and leisure in the West Kowloon Cultural District will increase by nearly 80% compared with the past 12 months; and the average monthly income of car parks will also increase by nearly 90% compared with the 12 months in the same period. .
The Art Square Building project consists of three commercial buildings with a total gross floor area of approximately 699,000 square feet.
(Picture of West Kowloon)
Received at least 4 tenders in February this year, including Xinzi, Xindi
According to the information, the Art Plaza Building, a commercial development project in the West Kowloon Cultural District, launched a tender in November last year and adopted a build, operate and transfer model (BOT). Responsible for the design, construction, financing, marketing, leasing, management and maintenance of the Place des Arts building project.
In December last year, the authority announced more details, including that after the announcement of the tender results, the winning consortium would be required to pay a fixed rent in two instalments; when the property was completed, the winning consortium would have to pay the authority a share of the revenue, up to a maximum rate of 20%.
The project was closed on February 11 this year. At that time, at least 4 bids were received. The winning consortium included SHKP (0016), Sinochem (0083), Chinachem and Link (0823).
The Art Square Building involves 3 commercial buildings with a total floor area of nearly 700,000 square feet
The Plaza Art Building project consists of 3 commercial buildings with a total gross floor area of approximately 699,673 square feet, 672,063 square feet for offices, and 26,910 square feet for retail, dining and entertainment.
The project is located at the Art Square in the heart of the West Kowloon Cultural District.
There are many world-class art and cultural facilities in the surrounding area, including Asia's first global contemporary visual culture museum M+, the recently officially opened Hong Kong Palace Museum, the performing arts complex under construction, and an 11-hectare arts complex facing the Victoria Harbour. garden.
West Kowloon Art Plaza Building Temporarily Accepting 4 Tenders SHKP, Sinochem, Chinachem and Link for Phillips Auction House to lease the 6th floor of West Kowloon Cultural District Authority Building West Kowloon Authority Art Plaza Building The tender involves 34 years of development and operating rights