7th phase of Lohas Park land premium $3,147 per sq. ft, hitting new high in district,total land premium at HK$3.89 b
The MTR Corp (0066.HK) received 28 letters of bidding interest from HK developers in 7th phase of Lohas Park, mixed commercial & residential project located at Tseung Kwan O, from 27 April to 4 May. On 6 May, the group opened the tender until 2 June.
The whole investment cost estimated may over HK$100 million, only are those big developers like CK Hutchison Holdings (0001.HK) and Sun Hung Kai Properties (00016.HK) could be afford, so the MTR Corp allows participants to choose between two options to attract small and medium developers:
- Option A, the awarded developer can own the whole project, including commercial & residential part and management rights. It have to give back to the MTR Corp 10% of proceeds that are net of 65% of building cost. In this case the project will be awarded to the highest bidder.
- Option B, the awarded developer gives up the ownership of the shopping mall and MTR Corp agrees to buy back the mall for HK$4.98 b. Developer is required to full pay the land premium at HK$3.89 b. The project will be awarded to the developer who can offer MTR Corp the highest amount of profits from flat selling in the future.
This the 1st project of the series to provide both residential buildings with 756,300 sq ft in 1,250 units and commercial development covering 480,000 sq ft.
MTRCL will allow bidders to choose between two options. If a developer wants to own the mall, it will have to give back to the rail operator 10% of proceeds that are net of 65 % of building cost. In this case the project will go to the highest bidder.
Under the second option, MTRCL will agree to buy back the mall for HK$4.98 billion but demand at least 10 percent of profit from the whole development. The mall, to be completed in 2020, will be far from the Tseung Kwan O core, but the only arcade in Lohas Park, which is expected to have 100,000 residents when all phases are completed.
MTRCL received 28 letters of bidding interest from firms, including mainland companies Vanke Property (Hong Kong) and Shimao Property (0813.HK), leading local developers such as CK Hutchison (0001.HK) and New World Development (0017.HK), and shopping mall manager The Link REIT (0823.HK).