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MTR Rejects Partners for Tai Wai Project on Bid Concerns

MTR Rejects Partners for Tai Wai Project on Low-Bid Concerns
The MTR Corp. logo is displayed near one of the company's train stations in Hong Kong, China. Photographer: Jerome Favre/Bloomberg

July 10 (Bloomberg) -- MTR Corp., Hong Kong’s rail operator, failed to find a partner to develop a property project atop a station after rejecting all bids filed by developers as too low.

The rail company “would be exposed to a substantial risk of not recovering the costs of the development” had it accepted any of the three tender offers received for the Tai Wai station project, according to a statement on its website yesterday. MTR, which didn’t identify the developers that submitted bids, may tender the project again by the end of the fiscal year, it said.

Property buyers in Hong Kong need to “think carefully” before purchases because interest rates can’t drop further, Financial Secretary John Tsang said this week. The number of home transactions in Hong Kong fell 35 percent in June from a year earlier after a 14 percent drop in May, according to Land Registry statistics.

MTR fell 0.6 percent to close at HK$26.95 in Hong Kong trading yesterday before the announcement. The stock has gained 7.2 percent this year, compared with the 5.4 percent gain in the city’s benchmark Hang Seng Index.

Hong Kong’s residential housing prices have jumped more than 80 percent since early 2009 on the back of record-low mortgage rates and a lack of new supply.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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