MTR (0066) Lantau Island Siu Ho Wan depot project, the first phase part has received letters of intent recently.
According to the data, the MTR signed a land exchange document with the government at the end of last month. The project involves more than 8.6 billion yuan in land premium. If it is announced together with the previous announcement, it is expected that the MTR will have to bear about 36 billion yuan in upfront costs, a total of at least 44.6 billion yuan. The total floor area of private residential and commercial properties that can be built in the project exceeds 9.26 million square feet, and the floor price per square foot is about 4,800 yuan, which is in line with market expectations.
Based on MTR’s previous announcements, information from the Town Planning Board and the latest land premium documents, the MTR exchanged the original site of the Siu Ho Wan depot this time, and the new site is Lot No. 145 and No. 146 in D.D. 346 , among which Lot No. 146 is all subsidized housing, and the land premium is only 1,000 yuan; as for Lot No. 145 (including A, B and C sites), it is mainly used for private housing development, with commercial and social welfare facilities, etc. , the amount of land premium for this lot is 8.603 billion yuan.
Lot No. 145 has a total buildable floor area of about 9,262,400 square feet, including 8,891,100 square feet for private residential development, and about 371,300 square feet for commercial and social welfare facilities. If the land premium is 86.03 Calculated at 100 million yuan, the average floor premium per square foot is only about 900 yuan.
However, MTR also issued a notice in September this year stating that the Siu Ho Wan project is different from the previous model of "railway plus property". The cost of adding a platform on top of a depot to carry out superstructure property development projects) and site formation works has been accepted by the government as a deductible expense for land price assessment. Calculated at the price in December 2020, the upfront cost involves about 36 billion Yuan, and it is expected that such expenses will be incurred in the next 15 years or so.
Based on this calculation, the amount of land premium for the above-mentioned project, together with the upfront costs, involves a total of at least 44.6 billion yuan. Based on the buildable floor area of Lot No. 145, the floor price per square foot is about 4,800 yuan. However, it is worth noting that due to the above 360 The upfront cost of 100 million yuan includes the subsidized housing part. Market participants estimate that if the upfront cost of the site is deducted, the floor price per square foot of the private housing part may be lower than 4,800 yuan.
In addition, letters of intent have been received for the first phase of the Siu Ho Wan depot project, and 33 consortiums have been attracted to submit letters of intent. It is estimated that the MTR will launch a tender in the short term.
