Only two residential sites with Victoria Harbour views remain for tender on the Kai Tak runway.
Around 57% of the government residential sites up for tender in H1 2019 were sold to mainland developers and their consortiums, which is higher than the 43% recorded in H2 2018, suggesting that mainland developers remain optimistic about the city’s housing market over the medium-to-long term, a report by JLL revealed.
Whilst developers remain keen on buying sites at Kai Tak, only two remaining residential sites to be tendered on the Kai Tak runway could enjoy Victoria Harbour views after the government awarded the tender for Kai Tak Area 4C Site 1 property, JLL noted.
According to information from the Town Planning Board, whilst two residential sites remain for tender on the Kai Tak runway where future units could enjoy Victoria Harbour views, their views will be more obstructed as the sites are located further away from the tip of the runway.
In May, a residential development site in the area was awarded to a consortium comprising China Overseas Land & Investment, Chime Corporation, Empire Development, Henderson Land, New World Development and Wheelock Properties for $12.59b.
The winning bid for the latest Kai Tak site remained high, despite the escalation of tensions between the US and China, and a bout of social unrest that has dented market sentiment. The asset value of $19,636 psf has crowned the consortium as the new ‘Land King’ in Kowloon East, JLL noted.
According to Henry Mok, senior director of capital markets at JLL, most of the future units on the sites in Kai Tak’s former runway area are already being imagined by the market as a future high-end residential area within the city. “It has attracted the interests from both Hong Kong and mainland developers. We expect developers will remain intact on the remaining two waterfront sites,” he said.
With prices in the top-end of the housing market having held up better during the last market correction, developers are expected to remain keen on acquiring development sites in Kai Tak, and help support land and property prices in the area.
Beyond Kai Tak, there will be an extremely limited supply of Victoria Harbour seafront residential developments completed in the city’s urban areas. JLL’s data on future supply suggested fewer than five such residential projects will be completed between 2019 and 2020.
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