| HONG KONG
HONG KONG May 12 The number of firms bidding
for a highly anticipated grade-A office site at the heart of
Hong Kong's central business district fell below expectations on
Friday, though experts say it could still be snapped up at a
The rare site at Murray Road, the only plot of commercial
land tendered for sale in Central in two decades, is widely seen
as a prime location for a company headquarters due to its
location and gross floor area of more than 460,000 square feet.
A poll of six analysts and surveys put the estimates between
HK$14 billion ($1.8 billion) and HK$22.3 billion ($2.86
The results could be announced as early as Monday.
The market had expected up to 20 local and mainland Chinese
firms to submit tenders, but a Lands Department spokesman told
Reuters the government only received nine tenders before the
deadline passed on Friday.
"It's a bit anti-climactic," said Denis Ma, head of research
at JLL's Hong Kong office. "The lump sum ultimately is probably
a bit of a sticking point (for mainland Chinese companies),
especially if financing is a problem."
China's strengthening of capital controls late last year,
restricting funds flowing out of the country as the yuan
plummeted, could be a factor behind the dampened enthusiasm,
"I'm not 100 percent sure about the financial arrangement of
each mainland Chinese developer, but given the tighter capital
controls from the Chinese government, this is probably one of
the reasons behind we are seeing less participants for this
site," said Marcos Chan, head of research for Hong Kong,
Southern China and Taiwan at property consultancy CBRE.
Mainland Chinese companies piled into Hong Kong property in
2015-2016, outbidding some of the territory's most powerful
developers to gobble up 29 percent of land sold for development
in one of the world's most expensive real estate markets,
according to industry figures.
Recent high-profile bidding successes by mainland Chinese
firms, including the record-breaking purchase of a residential
site at HK$16.9 billion ($2.18 billion) by two mainland Chinese
developers in February, ramped up expectations that a sizable
number of mainland developers and companies could be
aggressively bidding for the Murray Road site.
Hong Kong was the second most popular destination for
mainland Chinese real estate investment in 2016, and it will
likely usurp New York City at the top in 2017, according to an
April report by real estate services company Colliers
($1 = HK$7.79)
(Editing by Nick Macfie)