Central harbourfront site: Henderson’s US$6.5 billion bid 37 per cent higher than next best offer

Henderson Land Development paid an eye-watering HK$13.7 billion (US$1.75 billion), or 37 per cent more than the next best bid, for a harbourfront plot in Central last month.

Pacific Gate Development, a unit of Henderson had bid a record HK$50.8 billion to bag a 50-year land grant for the New Central Harbourfront Commercial Site 3 in front of the old General Post Office and next to the International Finance Centre.

Only two of the six bids, including Henderson’s, met the reserve price for the 516,316 square feet site, while all proposed designs passed the requirement, the Development Bureau said in a statement on Wednesday.

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The government had adopted a “two-envelope” approach for the Central harbourfront site to put a cap on land prices. It was meant to take into account the merits of the design as well as the highest price.

While the statement did not mention the name of the runner-up, the bid came in at HK$37.1 billion and its overall score was 84.86, about 15 points lower than Henderson’s.

The government only released the runner-up’s design, which called for erecting four blocks towards the harbourfront.

Henderson’s design only has three blocks, two of which will be office buildings and the one closest to the harbourfront will be multifunctional.

The winning design will “accentuate Hong Kong’s image as Asia’s World City”, the government said last month. “Adequate separation is proposed among the buildings as ventilation corridors and city windows, in order to ensure that the development will have sufficient natural ventilation and lighting,” the statement added.

The tender attracted Hong Kong’s biggest developers: the most valuable developer Sun Hung Kai Properties, Li Ka-shing’s flagship company CK Asset Holdings, as well as tycoon Peter Woo’s Wharf Real Estate Investment Company.

The city’s subway operator MTR Corporation submitted a joint proposal with Chinachem Group, while Robert Ng Chee Siong’s Sino Land partnered with the Lo family’s Great Eagle Holdings and China Merchants Group in a joint bid.

Henderson said that it plans to invest HK$63 billion to develop the site, which can yield 1.6 million sq ft of gross floor area, to create an iconic landmark and a “social destination dedicated to public enjoyment”.

Martin Lee Ka-shing, Henderson’s co-chairman and the younger son of founder Lee Shau-kee, said the site will be developed into a world-class landmark destination.

“Henderson Land is rooted in Hong Kong and we are confident of the city and we hope to leverage what we are good at to give back to society,” he said.

More from South China Morning Post:

• Henderson buys Hong Kong’s ‘land king,’ paying a record US$6.5 billion for harbourfront commercial plot in Central
• After Henderson Land’s record bid, here are the 5 other most expensive land sales in Hong Kong
• Henderson confident of delivering world-class landmark at Central harbourfront, dismisses dividend payment fears
• Hysan, Chinachem’s HK$19.8 billion bid wins first plot of land in Causeway Bay to be auctioned by Hong Kong government since 1997

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