The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Henderson Land Development Co. outbid eight other developers and will pay a record HK$23.3 billion
($3 billion) for the first commercial land to be sold by Hong Kong’s
government in the Central district since 1996.
The Hong Kong company’s shares fell the most in the Hang Seng Properties Index on Wednesday, sliding as much as 2.9 percent. Henderson Land beat local rivals including units of Cheung Kong Property Holdings Ltd. and Wharf Holdings Ltd., the Lands Department said. The firm will build an office tower on the site.
The record price for the property, currently used as a car park, underscores strong demand for office space in Central. Since MTR Corp. sold a waterfront site for the landmark International Finance Centre in 1996, no new supply has come on stream. The area’s vacancy rate was only about 1.5 percent in the first quarter of this year, according to CBRE Group Inc.
“The price surprises on the high side,†said Alfred Lau, an analyst at Bocom International Holdings Co. “However, the market may not share such a bullish outlook,†Lau said, adding that Henderson Land should consider introducing a partner to share the risk.
Office space in Central is the world’s most expensive, according to a CBRE survey released in March, which ranked the rents ahead of those in Beijing districts, Hong Kong’s West Kowloon, London’s West End, midtown Manhattan and Tokyo.
The price per square foot for the deal is about HK$50,000, according to Bloomberg calculations based on a maximum gross floor area of 465,000 square feet. That compares with:
HK$36,200 per square foot when China Evergrande Group paid a record for a commercial building in 2015 HK$39,700 per square foot in March for units in 9 Queen’s Road Central that are the city’s most expensive office space, according to the Apple Daily newspaper.