Bidders for Kai Tak residential sites plunged 67%

The number of consortiums bidding for larger-scale sites rose.

The average number of bidders for residential sites in Kai Tak slid 67% to just 5.5 in 2019 from two years ago, according to a report by JLL. In comparison, the average number of bids were 6.5 in 2018 and 16.3 in 2017.

Particularly, NKIL 6554 attracted only 4 bids when the tender announced on 13 November, the lowest amongst residential sites in the vicinity so far along with NKIL 6577 sold in July.

JLL senior director of Capital Markets Henry Mok attributed this partly to the growing number of consortiums participating in tenders for larger-scale sites, whilst developers minimized investment size due to downside risks in the market.

“The Kai Tak site (NKIL 6554) has been sold to a consortium comprising of China Overseas Land and Investment, Henderson Land, K Wah International and Wharf Development for HKD 15.95 billion. The accommodation value was 27% less than the amount paid for an adjoining site (NKIL 6553) five months ago,” Cathie Chung, senior director of Research at JLL, said.

Chung added that a rise in unemployment rate as well as the uncertainties in the city’s political situation have caused developers to likely adopt more accommodative bidding and pricing strategies, which will cause land prices to fall.