Chinese Group to Pay Record $2.2 Billion for Hong Kong Land

  • Beats 13 other bidders in government sale of Ap Lei Chau site
  • Purchase price works out to about HK$22,100 per square foot

Ap Lei Chau island

Photographer: Tuomas Lehtinen/Getty Images

Two mainland Chinese companies outbid Hong Kong’s largest developers with a HK$16.9 billion ($2.2 billion) offer for a rare residential waterfront site, the highest price ever posted in a government land sale.

Logan Property Holdings Co. and KWG Property Holding Ltd. beat 13 other bidders including Cheung Kong Property Holdings Ltd. and Sun Hung Kai Properties Ltd., according to a statement Friday from the Hong Kong Lands Department. The purchase works out to about HK$22,100 per square foot, according to Bloomberg calculations based on government data.

The site in Ap Lei Chau island, which is connected to Hong Kong island by bridge, was hotly contested by developers keen to build in an area connected to the city’s extensive subway lines in December.

"Many Chinese developers were looking to build houses and larger luxury sea-view apartments,” said Thomas Lam, head of valuation and consultancy at Knight Frank LLP in Hong Kong.

The auction result was announced the same day Centaline Property Agency Ltd. released an index showing that existing home prices in the city had reached a record high, despite government attempts to cool the market.

The Hang Seng Property Index, which tracks the shares of 10 property companies, has climbed 15 percent this year, compared with an 8.9 percent increase in the Hang Seng Index.