The government will sell 12 residential sites, three commercial sites and three industrial sites in 2023-2024, plus three railway property development projects, three urban renewal authority projects, and private development and redevelopment projects. The land supply can build about 20,550 residential units, 201,730 square meters of commercial floor area and 170,000 square meters of industrial floor area.
However, among the 21 commercial and residential sites in the government's land sale plan and the "One Railway, One Bureau", three lands have previously failed to bid. At the beginning of this year, the residential site on Cape Road, Stanley, and the first phase of the MTR Siu Ho Wan development project on Lantau Island failed to be successfully auctioned.
The market is not optimistic about the prospects of the project.
Commercial Land No. 4, District 4C, Kai Tak, Kowloon, had a valuation limit of more than HK$10 billion in those years, but now the market valuation has dropped to around HK$3 billion.
Some people think that the failed bid is mainly due to the government’s “off-site” and high pricing. However, there are many previous transaction projects that are below the lower limit of market valuation. In addition, the information controlled by the government through the Land Registry may not be less than that of individual developers. Therefore, this The conclusion is likely to be difficult to establish.
Goldin Financial (0530) announced that the commercial land in District 4C of Kai Tak has been booked. After the re-tendering, the Lands Department failed to bid for the land due to the lack of reserve price.
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Stream mark non-majority re-push failed
In fact, since October 2011, the government’s land sales plan has adopted bidding methods instead of auctions. Since then, there have been only 16 failed bidders, accounting for nearly 300 projects, which is not a lot.
Moreover, many land sites have been successfully re-launched after losing bids. For example, the commercial land in District 57 of Tung Chung was approved to Chinachem Group for nearly 2.8 billion in March last year, and the commercial land in District 2A of Kai Tak, Kowloon was rezoned for residential use. , which was won by Cheung Kong at a high price of 8.7 billion yuan at the end of last year, reflecting that the failure of the project bid may only be an individual or short-term situation.
Projects in the Government's Land Sale Program (Source: Lands Department)
The only example that can barely be called two failed bids is Site 4, Area 4C, Kai Tak, Kowloon, which will be relaunched next year.
However, when the project was first tendered in 2019, Goldin Financial's Junteng Investment was awarded 11.1 billion yuan. However, due to the strengthening of the mainland's control over the property market, the project was forced to "squeeze a contract", so the project had to be re-tendered in a hurry in the same year and ended in failure. , Strictly speaking, it cannot be regarded as a real two-degree flow mark.
In fact, even if the commercial and residential land under the government's land sale program is withdrawn, it can often be successfully relaunched in the short to medium term.
The projects of Fojin Road, Pak Shek Kok, Tai Po, Sai Shan Road, Tsing Yi, and Au Tau, Yuen Long were all successfully re-launched and sold within less than a year after the initial bidding failure; the later Man Fai Road project on the Peak can also be split after two years Into two sites approved.
Large scale or reduced tender interest
As for the MTR and URA projects that have lost bids recently, the former has received three bids from Cheung Kong, Wheelock and Sun Hung Kai Properties for the reconstruction of the MTR Siu Ho Wan depot and the first phase of superstructure development, while the latter has only won the new land A tendered Kwun Tong Town Center Development Zone 4 and 5 redevelopment project.
A detailed examination of the recent bidding projects of the government and the First Railway and First Bureau shows that many of them are located in locations with obvious advantages and have high development potential.
Stanley Cape Road is a traditional luxury residential area, and it is not far from the square, market and gymnasium in the central area of Stanley, so it should have great development potential.
As for the first phase of Siu Ho Wan, which is the superstructure project of the MTR station, the Kai Tak project has been sold at a high price in the past, and the Kwun Tong redevelopment project is also directly adjacent to the MTR Kwun Tong Station, which also indicates that the above-mentioned areas have certain appreciation potential.
However, one thing these projects have in common is that they are relatively large in scale, and the heavy investment pressure in the early stage may reduce the developer's willingness to bid. For example, the Kwun Tong site with an area of 275,500 square feet is the largest single project in the history of the URA. At that time, Fang even stipulated that the bidding consortium must reach a certain net asset value or market value.
Recently, both the Siu Ho Wan and Kai Tak sites have voiced their wish to split the land for sale, and the market is also concerned about the hasty progress of individual projects and the various requirements for bidding terms.
Government officials and the decision-makers of the "One Railway, One Bureau" must, on the one hand, try to ensure that the precious land will not be sold at a low price; can proceed more smoothly.
In fact, at the end of 2021, the property development project of the MTR Tung Chung Traction Distribution Station failed to bid. However, after reducing the amount of land premium and adjusting the bidding terms, Chinachem Group successfully won the bid when it was relaunched in July 2022.
At present, the MTR has confirmed that it will re-launch the first phase of the Siu Ho Wan project in the coming year. Although the fourth and fifth development areas in Kwun Tong City Center are not included in the list, Wei Zhicheng, the executive director of the URA, also expressed that he will consider this project Added residential elements to relaunch.
The MTR Siu Ho Wan depot project on Lantau Island will build public and private residential units.
(File photo/photo by Li Zetong)
Need to optimize project arrangement terms
However, it can be seen from the past cases of unsuccessful bids that the types of uses and the distribution of dates are indeed worthy of attention. For example, from 2019 to 2021, out of the nine commercial land launches, five failed bids, and they were concentrated in the Kai Tak New Development Area. The doubts about the vision of the "Core Business District" echo each other.
In terms of time, as early as 2014, projects had successively lost bids.
In January of that year, the property development project above the Tin Wing Station of the Light Rail failed to tender twice. In March, the government’s land sale plan for the residential site on Fo Chin Road, Pak Shek Kok, Tai Po was withdrawn from the tender. In July, it was the URA’s turn to redevelop the Kwun Tong city center. The plans for the second and third development areas failed to be approved.
Coincidentally, the property price index in the same period in 2014 was in a rampant stage, and a series of incidents caused widespread concern at that time.
However, the three projects of Kwun Tong City Centre, Pak Shek Kok and Tin Wing Station were successively approved after adjustments in September 2014, November 2014 and February 2015 respectively, and the property prices immediately rose accordingly.
The society does not need to worry too much about the frequent cases of failed bids for a while. In particular, we should avoid mediocrity and panic. We should view and observe with a rational and calm attitude.
Officials don't seem to be too worried about the land bidding situation. The Financial Secretary, Paul Chan Mo-po, emphasized that the overall land sale or relaunch of the project will be "according to the market".
However, it can be seen from the above cases that bidding conditions, land use planning, and land push time can also affect whether the project will fail the bid, which deserves the attention of the authorities.
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