Henderson Land Development Co. (12), controlled by billionaire Lee Shau-kee, will spend HK$6.5 billion ($839 million) on a shopping center in a prime retail area of Hong Kong after beating 17 rivals to win a land tender.
The complex in the Tsim Sha Tsui district will be completed by 2019 and will house retail, services and dining, as well as a public 345-space parking garage, spokeswoman Bonnie Ngan said yesterday, citing Vice Chairman Martin Lee, Lee Shau-kee’s younger son. Henderson won the site for HK$4.69 billion as the highest bidder, the government said in a statement yesterday.
Henderson beat other developers, including Cheung Kong Holdings Ltd. (1), Sino Land Co. (83), and Sun Hung Kai Properties Ltd. (16), to win the site in the district host to global luxury brands and hotels such as the Peninsula. The price was about 38 percent higher than the HK$3.4 billion median estimate of three surveyors compiled by Bloomberg News.
“The success of this project can showcase to investors the capability of the second generation of the Lee family,” said Joyce Kwock, an analyst at Credit Suisse Group AG, referring to Martin Lee. Lee is chairman of Miramar Hotel & Investment Co., of which Henderson is the largest shareholder.
The initial yield of the project is about 4.2 percent, she said.
The 2,630-square-meter (28,309-square-foot) site is only suitable for large developers because construction costs may be more than HK$1 billion, according to Thomas Lam, the head of valuation and consultancy at Knight Frank LLP in Hong Kong.
Companies are interested in the development as a long-term investment property, he said before the tender result. As much as 31,560 square meters of floor area can be built on the site, according to the government.
Henderson shares fell 0.3 percent to HK$54.85 as of 10:05 a.m. in Hong Kong trading, compared with the 0.2 percent decline in the benchmark Hang Seng Index. The stock has gained 36 percent this year, making it the best performer out of nine companies in the property sub-index.
To contact the reporter on this story: Michelle Yun in Hong Kong at email@example.com
To contact the editors responsible for this story: Andreea Papuc at firstname.lastname@example.org Tomoko Yamazaki