Henderson Land 1.37 billion won the Sham Shui Po commercial and residential project
Henderson Land (00012) has invested nearly $1.37 billion in the URA’s Castle Peak Road commercial and residential project in Sham Shui Po. It is about $10,300 per square foot of residential floor, which is about 7% lower than the market lower limit. It is expected that the project will be completed in the future. The sale started at 21,000 yuan.
Residential floor price of 10,300
The URA’s Castle Peak Road/Yuanzhou Street project was closed at the beginning of this month. It was the first project to limit the minimum area of 300 square feet per unit. A total of 17 consortia were awarded. The URA announced yesterday that the project was invested by Henderson for nearly 1.368 billion yuan, making it the highest bidder.
If the project can be built with a maximum floor capacity of nearly 160,000 square feet, that is, the land price per square foot is about 8,565 yuan, which will be 22% lower than the market expectation.
However, according to the terms of the tender, the developer has to return nearly 27,000 square feet of commercial floor to the URA for management after the completion of the project. Therefore, it is calculated on the basis of 133,000 square feet of residential floor available for sale. The land price is about 10,279 yuan, about 11,000 yuan lower than the market valuation limit, about 7%.
If the Hong Kong Ferry (00050) won the URA’s Tongzhou Street commercial and residential project in June this year (the residential floor price is about 10,500 yuan), the land price in the district will be reduced by about 2% in 4 months. However, compared with the landlord in the west of Xinghua Street in Cheung Sha Wan in November last year ($17,500 per square foot), the land price fell by more than 40% in 11 months.
The market is full of negative factors. Lin Haowen, senior director and director of valuation and consulting at Knight Frank, believes that the bid price is slightly lower than expected, but it is still a reasonable level. It is estimated that the project has sustainable development and intelligent system requirements, which will increase development costs. The new area limit is believed to have little impact on the bid, and the project is expected to develop small and medium-sized units.
Residential sales price is expected to reach 21,000
Assume that the construction cost per square foot of the project is about 4,000 yuan, taking into account the 10% factor of “water supply”. The total investment of the project is estimated to be about 2.07 billion yuan. After deducting the commercial floor of the URA, it will be 20% development profit and Based on the 80% utility rate calculation, it is estimated that the practical price of the residential part will be up to 21,000 yuan in the future. The price of the utility model is similar to that of the nearby Haitong.