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Wheelock Beats Cheung Kong to Win Kowloon Residential Site

May 29 (Bloomberg) -- Wheelock & Co., controlled by the family of billionaire Peter Woo, beat 11 rival developers to win a Hong Kong site for residential development as the government speeds up land sales to boost housing supply.

Wheelock won the 7,674 square-meter (82,600 square-feet) plot in Kai Tak district for HK$2.5 billion ($322 million), the government said yesterday in a statement. Other bidders included China Overseas Land & Investment Ltd., Sun Hung Kai Properties Ltd. and Cheung Kong Holdings Ltd., it said.

Hong Kong’s government is targeting to build 470,000 new homes over the next decade as Chief Executive Leung Chun-ying seeks to resolve the city’s housing shortage. The Kai Tak site, part of the area that used to house the former airport, will have no less than 630 residential units, the government said.

“The price achieved is within market expectation, reflecting high-quality urban sites are still sought-after,” James Cheung, a surveyor at Centaline Property Agency Ltd., said in a statement yesterday. “The bids by the developers were also relatively aggressive.”

Great Eagle

The government yesterday also awarded a 19,400 square-meter residential plot in Tai Po in the New Territories to Great Eagle Holdings Ltd. for HK$2.4 billion, which translates to a record-low price in the district of HK$3,300 per square foot based on gross floor area, according to Centaline’s Cheung.

The developer, which owns offices, shopping malls, and hotels in Hong Kong, plans to invest HK$7 billion to build a luxury development on the site with 500 to 700 units, it said in an e-mailed statement.

Great Eagle rose 2.8 percent, the most in more than three weeks, to close at HK$27.90. Wheelock advanced 0.5 percent to HK$31.50, compared with the 0.3 percent drop in the benchmark Hang Seng Index.

“While urban land prices continue to hold value, suburban land prices continue to trend lower,” Paul Louie, an analyst at Barclays Plc, said in a note today. “With ever lower replacement costs, developers have little incentive to ration their inventory.”

The government rejected seven bids for another residential site in Tai Po in March because they didn’t meet the reserved price, according to the government. Bidders for that plot included Great Eagle, Wheelock, and Cheung Kong.

To contact the reporter on this story: Michelle Yun in Hong Kong at myun11@bloomberg.net

To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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