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1. Big names get in line for $1b development

2. Dilbert

1. Big names get in line for $1b development
Raymond Wang, The Standard 9 March 2004

In a sign of growing confidence in the residential property market, 32 developers have submitted expressions of interest in the HK$1 billion Johnston Road redevelopment, the Urban Renewal Authority's (URA) first project this year.

The bullish outlook was further confirmed at the weekend when flats at a luxury development in West Kowloon sold for an average HK$14,000 per square foot.

Cheung Kong (Holdings), Sun Hung Kai Properties, Henderson Land Development, New World Development, Hopewell Holdings, Wharf Holdings and Shun Tak Holdings are among the big names eyeing the Wan Chai project.

Chinese Estates Holdings, Kowloon Development, Far East Consortium, China Overseas Land and Investment, Chevalier Group, Chuang's Group, Emperor Group, Nan Fung Development, HKR International and other unidentified small developers are also interested.

Some 16 developers are expected to be shortlisted for the Johnston Road project, of which Hopewell Holdings and Chinese Estates are the frontrunners as they are expected to bid aggressively to strengthen their foothold in the district.

Two key factors in the selection of finalists are a developer's financial strength and its past experience with the URA. A selection panel under the URA board will shortlist the qualified parties and invite them to submit a formal tender.

``We feel very encouraged at the response,'' a URA spokesman said.

It estimates the cost of the Johnston Road redevelopment project at HK$650 million, mainly in compensation to homeowners, demolition costs and interest, but excluding construction expenses.

A developer who declined to be named estimated total investment at between HK$800 million and HK$900 million.

It is expected to fetch about HK$1 billion in revenue, assuming it sells for HK$4,500 per square foot, representing a profit margin of more than 17 per cent.

The 28,000 sqft site - bounded by Johnston Road, Ship Street, Tai Wong Street West and Tai Wong Street East - is expected to generate 28,000 sqft of retail floor area and 190,000 square feet of residential floor area when completed by the end of 2007.

SK Pang Surveyors managing director Pang Shiu-kee said the number of submissions for the Wan Chai project was well above expectations, reflecting developers' confidence in the residential market.

He said the Johnston Road site is well located and in an area where supply has been limited over the past 10 years.

Meanwhile, submissions for another URA project on Yeung Uk Road in Tsuen Wan ends today. At least eight developers have so far handed in ``letters of intent'' for the project.

It will feature a commercial-residential project covering a site area of 77,800 sqft.

2. Dilbert
SCMP, 9 March 2004