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Henderson Land Development acquired a car park building in Hong Kong for a record price of HK$23.3 billion (S$4.18 billion), or HK$50,000 (S$8,937) per sq ft based on a maximum gross floor area of 465,000 sq ft, reported Bloomberg.
The first commercial site in the central district to be sold by the Hong Kong government since 1996, the site will be developed by Henderson Land into an office building.
The Hong Kong firm clinched the rights to develop the site after outbidding local rivals including Wharf Holdings and Cheung Kong Property Holdings, revealed the Lands Department.
The property’s record price underscores the robust demand for office space within the central area of Hong Kong.
This comes as no new supply has entered the market since MTR Corp sold a waterfront site in 1996 for the landmark International Finance Centre. Moreover, vacancy rate within the area stood only at around 1.5 percent in Q1 2017, said CBRE.
“The price surprises on the high side,” said Bocom International Holdings Co analyst Alfred Lau. “However, the market may not share such a bullish outlook.”
Meanwhile, only one of the nine bidders came from mainland firms, reflecting a cooling of interest from Chinese buyers following three residential land auctions in which at least a third of the bidders were mainland property developers.
Located near Cheung Kong Centre and the iconic Bank of China skyscraper, the car park building is worth HK$15.8 billion (S$2.8 billion) to HK$17 billion (S$3 billion) as per Colliers International estimate last year.
In a statement, Henderson Land said the acquisition will be financed by internal resources and bank funding. It added that the office building, which will also feature some retail facilities, is set to be completed by 2022.
This article was edited by Denise Djong.
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