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Legco protest at Stanley mall plan 2.
Bidders shy away from Hunghom tender
1. Legco protest at Stanley mall plan Stanley
residents plan to demonstrate outside the Legislative Council building next week
as representatives inside hand a protest petition with 3,000 signatures to the
Legco Complaints Committee. The May 3 demonstration is in response to plans to
build a shopping mall that would cover much of Stanley Market. Yvonne Fitzsimmons,
of the Stanley Restaurant Association, and of Enhancement of Stanley as a Tourist
Area (ESTA), has asked protesters to take along posters and placards. "The
[protest] committee - formed by shopkeepers, stall operators, restaurateurs and
residents - is asking the Legislative Council to strongly consider our request
that Stanley Market remain as it is," Ms Fitzsimmons said. "Tourists
and local people believe that Stanley's character and ambience is important to
maintaining the integrity of this type of shopping atmosphere. "Stanley already
has a mall in Stanley Plaza. It does not need another sterile commercial building."
The association has collected more than 3,000 signatures, she said, mostly from
tourists. "These petitions are in favour of keeping the uniqueness that is
Stanley Market," she said. The petitions, which will be handed to the Legco
committee, were also presented to the Planning Department on April 12. A furore
broke out last month when residents, business people and tourists learned of a
plan to build a nine-storey, 89-room hotel near Stanley Market and to rezone 1,990
sq metres of government land, now occupied by the market, as three shopping blocks.
The plan has been opposed by the Tourism Commission, the Hong Kong Tourism Board
and most market stallholders. The area is listed by the board as Hong Kong's third
most popular tourism attraction. The Planning Department and Southern District
Office refused to name the developer, which asked the company's identity be kept
secret. [Source:
SCMP, 24 April 2002] 2.
Bidders shy away from Hunghom tender
Potential buyers are cautious about bidding for The Metropolis in Hunghom because
a buy-back clause for the tender sale provides Cheung Kong (Holdings) with an
advantage to become the ultimate purchaser. Cheung Kong, which built the commercial
complex, and joint-venture owner Kowloon-Canton Railway Corp (KCRC) announced
details for tendering the new project last week. On sale is the completed phase
one, providing a total gross floor area of 1.04 million square feet - with a 690-room
hotel, a 344,340- sqft retail centre and a 15-storey office block. The hotel and
retail centre are offered separately, while the office block is to be sold floor
by floor. The tender sale has been long awaited. Cheung Kong and KCRC had appointed
independent valuation companies to assess the property before the tender. Market
surveyors put the total value of phase one at more than HK$3 billion. Nan Fung
Development project director Donald Choi said the group was interested in the
office block because future transport improvements in Hunghom could boost demand.
He estimated a quality office in Hunghom could be worth HK$3,000 per square foot,
taking into account secondary transactions at nearby commercial development Concordia
Plaza in Tsim Sha Tsui East. ''Bulk sale will be discounted substantially,'' he
said. ''The discount will exceed 20 per cent.'' However, he said the group had
yet to make a decision on an offer. ''[Our] interest will not be keen due to the
tender format,'' he said. The buy-back clause implied either Cheung Kong or KCRC
had an intention to buy the property, he said. This was different from the usual
practice of the vendor reserving the right not to sell. At last week's announcement
of the tender, KCRC property director Daniel Lam said under the joint-venture
agreement signed in 1999, Cheung Kong and KCRC had the right to buy the hotel
and retail portions at prices higher than tender offers within 90 days of the
close of tenders. The tender will close on May 6. Cheung Kong executive director
Justin Chiu Kwok-hung said at the briefing buyers for the hotel or the whole office
block could have the naming rights. Cheung Kong was interested in the project
but whether to buy the remaining shares from KCRC depended on further studies
of the tender documents. Analysts said while KCRC had an obvious intention to
cash in from a sale of its interest, Cheung Kong was generally regarded as a keen
buyer considering its substantial presence in Hunghom and its strong interest
in strengthening its property portfolio there. At two public auctions last year,
Cheung Kong paid a total of HK$1.74 billion to buy two major commercial sites
near The Metropolis. Analysts said the buy-back clause would discourage buyers
because it gave Cheung Kong the advantage to acquire the hotel and retail portion
of the project. Surpass Property Strategy Consultant Charles Lai Chin-pang estimated
The Metropolis was worth HK$3.73 billion with the retail portion valued at HK1.72
billion, the hotel at HK$1.38 billion and the office block HK$630 million. He
said a three to four-star hotel in Hunghom justified HK$2 million per room, a
retail centre limited to local customers would be worth HK$3,500 to HK$8,000 per
square foot and offices could fetch HK$2,500 per square foot. He expected the
rental yield for offices in the project could reach 6 per cent, while retail space
could exceed 10 per cent. Mr Lai said the property was good but market response
to the tender would not be satisfactory. Tenderers would bear additional risk
for such a huge investment because their offers could be put on hold for 90 days
before they were accepted or rejected by the vendor. ''It's unfair as the tenderer
cannot withdraw [their offers within the period if the market softens],'' he said.
''In fact, seven days would be enough for the vendor to decide whether to accept
the offer. The vendors do not seem to have a definite will to sell the property.''
New World Development property development manager Andrew Choi Fook-ming said
he would cautiously consider whether to make an offer. ''It seems a narrow playing
field, an unfair competition, as the owner can buy at a higher price,'' he said.
Because of location, The Metropolis was not as good as a residential or commercial
project in Central, he said. Kerry Properties chief financial officer Chew Fook
Aun said he could not say the group was not interested in the project at the moment.
But he was not sure whether the two joint-venture owners were interested in buying.
John Pattar, Asia chief investment officer for Lend Lease Real Estate Investments,
said that the Australian-based group was not prepared to bid on The Metropolis
because it was only interested in investing in Central office and luxury residential
developments on the island to strengthen its Hong Kong leasing profile. The group,
which had been active in buying SAR offices and luxury flats in recent years,
targeted prime locations with limited supply, good rental yield and good tenants.
He forecast the property market would be flat within the year because the September
11 terrorist attacks in the United States had affected the speed of a global recovery.
It would be a good time for acquisitions before a market rebound, he said. ''We're
a keen buyer and we're looking very hard [for real-estate acquisition] in Hong
Kong,'' he said. Mr Pattar said the group had acquired investment properties in
Asian cities, such as Seoul and Tokyo, at the beginning of this year. The real-estate
market in Hong Kong was ''pretty stable'' now, although the stock market was volatile,
he said. [Source:
SCMP, 24 April 2002] |  |
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