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1. Wheelock plans flats instead of mega hotel

2. Wheelock joins rush for industrial lots in Aberdeen

1. Wheelock plans flats instead of mega hotel
Raymond Wang, The Standard 11 May 2005

The Wong Chuk Hang site was originally rezoned for a 38-story hotel development with 1,462 guest rooms. STAFF PHOTO

Wheelock Properties plans to embark on a HK$2 billion residential redevelopment project in Wong Chuk Hang - instead of a planned mega hotel - after agreeing to buy an industrial site for HK$455 million.

The 49,000-square-foot site was originally rezoned for a 38-story hotel development - one of the biggest in Hong Kong in recent years, with 1,462 guest rooms - overlooking nearby Ocean Park.

However, Wheelock said that as leading developers are planning to build hotels in the same area, it will consider a residential project to avoid stiff competition.

Hotel projects in Wong Chuk Hang by Cheung Kong (Holdings), Sun Hung Kai Properties, Henderson Land Development, Swire Properties, Chinachem Group and HKR International are expected to provide nearly 10,000 rooms over the next five years.

The government is also being urged to authorize the building of three hotels next to Ocean Park to go with a long-debated extension of the MTR for an Island South line that would deliver customers to the park's front door.

``We acquired the site to replenish our land bank first and then we will study a right development, with other options including residential,'' Wheelock property investment director Gareth Williams told The Standard.

As the redevelopment is scheduled to be completed in five years, Williams said the company is not in a rush to apply for a residential development to the Planning Department in the near term.

The project, at No2 Heung Yip Road, would provide more than 500 apartments, and Williams estimated the current construction costs at between HK$1,000 and HK$1,200 per square foot. Centaline Surveyors associate director Chris Chau estimated total investments at almost HK$2 billion, or more than HK$4,000 psf, including construction costs, existing land costs and land premiums. The project would fetch as much as HK$2.5 billion, assuming a selling price of HK$5,000 to HK$6,000 psf, Chau said.

Currently on the site is a six-story industrial building completed in 1973, with total gross floor area of some 204,000 sqft and 82 percent of the space is leased. The site was approved by the Town Planning Board for a hotel redevelopment, with a total gross area of about 735,000 sqft, fetching HK$619 psf for the land price.

2. Wheelock joins rush for industrial lots in Aberdeen
ERNEST KONG , SCMP 11 May 2005

Wheelock Properties has joined a string of developers grabbing a foothold in the evolving Aberdeen industrial area, paying $455 million for a site approved for a 1,462-room hotel.

But the company is no rush to redevelop the industrial building at 2 Heung Yip Road in Wong Chuk Hang and be among the first to open a hotel in the area.

Ricky Wong Kwong-yiu, a director at Wharf Estate Development, a Wheelock subsidiary, said the firm was in "wait and see" mode. "The property is generating an annual rental yield of about 3 per cent, or about $1 million rental income a month, so we can just sit and wait."

Big guns such as Cheung Kong, Sun Hung Kai Properties and Henderson Land Development have been snapping up industrial projects in the area that have hotel redevelopment potential as they bet on a tourism boom with the opening of the Disneyland and Aberdeen's proximity to another drawcard, Ocean Park.

Based on the maximum redevelopment area of 735,000 per square foot, the industrial building on 2 Heung Ip Road has an accommodation value of $619 per sq ft, said Jones Lang LaSalle, sole agent of the project.

"I think the price is very reasonable, it is even cheaper than a site sold earlier this year in the same district," Mr Wong said.

The Joyce Building at 38 Wong Chuk Hang Road was sold last month for $128 million, or an accommodation value about $750 per sq ft.

Property consultants said high land premiums for hotel projects and worries about an oversupply had prompted some developers to reconsider hotel plans.

Sun Hung Kai Properties earlier scrapped a proposed hotel in Cheung Sha Wan, opting for a 24-storey office building instead. Kerry Properties has abandoned plans for a hotel at Enterprise Square Five in Kowloon Bay in favour of a shopping arcade.

Meanwhile, some developers remain bullish on hotels. Chinachem last year paid $49.84 million, or $222 per sq ft, to convert an industrial lot in Wong Chuk Hang into a hotel site.