Kerry Properties pays record HK$4.31bn for Ho Man Tin land

Kerry Properties secured a prime Kowloon hillside site at Fat Kwong Street for HK$4.31 billion. The acquisition price equates to US$549 million. The 55,650 square foot plot carries a 50-year land grant and permits 207,745 square feet of gross floor area, capable of accommodating approximately 250 homes. The tender attracted 10 bids from major developers.

Price far exceeds expectations

The winning bid surpassed market forecasts by a wide margin. The price works out to HK$20,738 per square foot of permitted floor area. This was well above analyst expectations.

Kerry’s offer exceeded the top end of these forecasts by 38 percent. It was roughly 66 to 76 percent above CHFT’s estimated award range. Alex Leung, chief surveyor at CHFT Advisory and Appraisal, said the awarded price level is a big surprise. Vincent Cheung, managing director at Vincorn Consulting and Appraisal, described it as "the highest land premium for a residential site in recent years".

Context within Kowloon land market

The deal sets the highest residential land price in nearly five years for Kowloon. The last site in the district to sell for more than HK$20,000 per square foot was in October 2021. Lai Sun Development paid HK$22,464 per square foot for a plot on Broadcast Drive in Kowloon Tong at that time.

Project details and Kerry’s broader strategy

Kerry Properties plans to build two 25-storey luxury residential towers on the site. The development will include a residents’ clubhouse and parking. Homes on the middle and upper floors are expected to have views of Victoria Harbour. This acquisition is part of a Hong Kong land-buying spree by the developer this year. Kerry has made four land purchases in the city in 2024, including sites in Shau Kei Wan, Kowloon Tong, and Mid-Levels West. These purchases total HK$6.5 billion. The Ho Man Tin plot alone provides nearly as much floor area as the three acquisitions made in the first half of the year combined.

Market reaction and developer outlook

Despite the high cost, Kerry remains confident in the project’s prospects. Calvin Tong, director and general manager for Hong Kong at Kerry Properties, expressed this confidence. The company’s recent success selling units at its Mont Verra project in Beacon Hill may have increased its pricing confidence. Builders remain optimistic about luxury home demand. Hong Kong generated 81 percent of Kerry’s first-half contracted sales, with local sales rising 1 percent to HK$5.6 billion. Mainland contracted sales fell 88 percent to HK$1.3 billion. The developer is expected to pursue larger luxury units requiring an average selling price of about HK$45,000 per square foot to generate a reasonable profit margin. The unsuccessful bidders for the Fat Kwong Street site included Sun Hung Kai Properties, China Overseas Land & Investment, Poly Property Group, Hang Lung Properties, Chinachem Group, CK Asset Holdings, K Wah International Holdings, and Wheelock Properties. Sino Land and Great Eagle Holdings submitted a joint bid. The site was the sole new government residential tender announced in the July-September land-sale programme. Development Secretary Bernadette Linn confirmed rezoning from government, institution or community use to residential use had been completed. Hong Kong’s annual land-sale list comprises nine residential sites capable of supplying over 6,500 homes. Consultancy CBRE estimated in an April review that the programme would offer only seven separate residential tenders. It identified Ho Man Tin and Shek Mun as more manageable urban development opportunities compared to other sites with greater planning constraints. Kerry must build branches of a neighbourhood elderly centre and a community mental wellness centre, whose floor space is excluded from the development limit.