The total investment cost of the project could reach $29.5b.
According to Maybank Kim Eng, the Lands Department announced that the Murray Road commercial site was awarded to Henderson Land (HDL) for HKD23.28b or ~HKD50,064/sq ft, outbidding eight other bidders. The winning price is at the upper end of market estimates.
Here's more from Maybank Kim Eng:
The site has been dubbed the ‘new commercial land king’ of Hong Kong. We estimate the total investment cost of the project (including interest cost) could reach ~HKD63,000/sq ft, or around HKD29.5b.
If assuming a 3% gross rental yield, the gross office rent could reach ~HKD175/sq ft/month. This could trigger a price rally in the Central office market, which we think HDL (~11% of GAV) and Cheung Kong Property (~17% GAV) should benefit the most under our coverage given their Grade A office portfolios in Central.
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