1 HK$6b bid wins Wedding Card St Hopewell, Sino Land take URA project
Olga Wong, SCMP 24 June 2009

The Urban Renewal Authority is expected to reap a fat profit from the redevelopment of Wedding Card Street in Wan Chai, which has been awarded to a consortium of two top developers with an upfront payment of more than HK$6 billion.

The payment by the Hopewell Holdings-Sino Land venture was more than double the required minimum of HK$2.8 billion for the project, which cost the authority HK$2 billion in acquisitions.

The consortium will also share with the authority half of anything it earns above HK$6.2 billion from sales.

The high upfront payment is seen as a vote of confidence by the two developers in the future property market and will also boost cash flow for the authority, which had a HK$4.5 billion operating deficit last year.

Six groups competed for the project, which is proceeding after opposition by residents and activists over destruction of wedding-card shops in Lee Tung Street, which gave the area its popular name.

"The consortium was chosen because it offered the highest tendering price," authority chairman Barry Cheung Chun-yuen said. "The project will increase our cash flow in this financial year."

The consortium will bear construction costs of about HK$3.5 billion, which was increased by 2 per cent because of required green features.

Mr Chung said he expected the authority would get a share of sales revenue if flats were sold at HK$7,400 per sq ft or more.

Savills Valuation and Professional Services managing director Charles Chan Chiu-kwok said the high upfront payment reflected the developers' optimism about the property market.

"Hopewell has been focusing its development on Wan Chai. It must offer an attractive price in order to maintain its influence in the district."

After facing vehement opposition to the project since it was announced in 2003, the authority eventually agreed to preserve three tenement buildings, one of which will become a museum featuring local weddings, and to reserve space for a social enterprise.

Mr Cheung said the three tenement buildings would be managed by the authority after refurbishment as their future use would have little commercial content.

The future shop tenancies will have to be approved by the authority to ensure the proposed business is consistent with the wedding theme of the redevelopment.

"Wedding-card-printing shops which have moved out are welcome back," Mr Cheung said.

The development, marketed as the authority's most environment-friendly project, is designed to cut carbon dioxide emissions by 23 per cent through efficient design and the use of renewable-energy devices.

In a joint statement, Hopewell Holdings co-managing director Thomas Jefferson Wu and Sino Land executive director Daryl Ng Win-kong said the project, which would offer 1,000 luxury flats, would be turned into a must-visit tourist destination that celebrated the city's heritage and culture.

Construction is expected to start by the end of the year.