ASIA NEWS: A whopper of a deal

A 31,000-square-feet site currently being used as a car park in the heart of Hong Kong is set to be sold by the government through a public tender.

The ‘Class A’ site in Murray Road is ensconced amid a number of iconic Hong Kong buildings, including the Cheung Kong Center and the Bank of China Tower. It will be the first commercial development site in the Central business district in 20 years and its location and estimated valuation are expected to generate significant interest from a diverse range of bidders, according to industry experts.

A look at the current per-square-foot price of some nearby office buildings gives an idea of the valuation. The Far East Finance Center is valued between HK$33,000 ($4,253; €3,997) and HK$35,000 per square foot, while the Lippo Center is between HK$28,000 and HK$32,000, according to property brokers. One Hong Kong-based real estate investment manager said the whopping price tag – Colliers puts it between HK$15.8 billion and HK$17 billion – means even the large managers interested in acquiring the site for a build-to-core strategy would need to assemble a consortium. In his view, it is more likely that the deal will be bagged by a property developer that has partnered with an anchor tenant for the property once it is constructed.

The bidding pool could include mainland state-owned enterprises, insurance companies, banks and property developers – buyers who will also be the end-users of the development site, according to Stanley Wong, executive director for CBRE’s capital markets team in Hong Kong.

Murray Road will be one of six Class A sites to be sold by the end of the month.