[ET Net News Agency, 16 November 2017] A consortium comprising Sino Land (00083),
Wheelock (00020), Shimao Property (00813), K Wah (00173) and Sea Holdings (00251) has won
the tender for the Cheung Sha Wan residential site for HK$17.3bn, a record high in terms
of value, or an AV of HK$17.5k/sqft.
HSBC Global Research believes the transaction represents developers' confidence in the
residential segment, especially the project situated next to the seafront. It estimated
the project's gross margin could reach 16% when the pre-sales begin in 2021 at an
estimated ASP of HK$28k psf.
The research house said Sun Hung Kai Properties (00016) is the key beneficiary, as the
company owns 2.1m sqft of land bank within the district at an average land cost of
HK$5.7k/sqft. The strong land sales result may positively impact market sentiment and lead
to more aggressive pricing on new launches by developers, it added.
HSBC maintained its positive stance on Hong Kong property companies. It expects the
sector to finally re-rate over the next 12 months, led by developers. The sector is
trading at an attractive 42% NAV discount. (KL)