Lai Sun Dev outbids Cheung Kong for a sea-side land parcel

The Tseung Kwan O parcel was won for HKD2.83b.

According to Maybank Kim Eng, LSD won a sea-side low-density Tseung Kwan O mix-use land parcel, through tender, for AV of HKD4,929 psf (or HKD2.83b for 573.3k sq ft of GFA), out bidding 5 other major developers such as Cheung Kong (1), Wheelock (20), New World Dev (17) and K. Wah (173).

Here's more from Maybank Kim Eng:

The price is 2-14% higher than the consensus range of HKD4,300-4,800 psf. Located adjacent to TKO MTR station, the plot ratio is 2.5x on the 226k sq ft site, with no fewer than 535 residential units to be built.

The developer is expecting a total investment of HKD6b, translating into a target all-in cost of HKD10,471 psf of GFA. Six blocks of 12-16 storey apartments will be built with around 580 units, while 20+ other houses/semidetached houses will also be added to the whole project.

Implication: The winner is a surprise to the market, yet the price offered is slightly higher than market’s expectation. LSD, 18 years after their last action in HK land auction/tender market, out bided developers with substantial exposures in the district, such as Cheung Kong.

Park Central and The Wings, both developed by SHKP (16) with mid and mid-to-high-end focuses, are transacting at HKD7,500 psf and HKD10k psf, respectively. Market rumour also suggested that Walter Kwok, the ex-Chairman/CEO of SHKP, is also a JV partner with LSD.

We believe the slight better than expected transaction price will help slightly in lifting the sector sentiment, and the secondary market price in the district may also be supported in the short-term