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Sandy Li

Pearl Liu

A joint bid by Hysan Development and Chinachem Group has won the first commercial site to be offered by the government in Causeway Bay for 24 years, for HK$19.778 billion (US$2.55 billion).
The price is much higher than expected, analysts said, showing developers’ confidence in the outlook for Hong Kong’s office market as the city tries to get back on track from a deep recession.
Patchway Holdings (HK), a joint venture set up by Hysan and Chinachem’s Chime Corporation won the plot on Caroline Hill Road for about HK$18,400 per square foot, the Lands Department said on Wednesday. Hysan already owns the Lee Gardens luxury shopping centre in Causeway Bay.
The price tag for the new parcel of land is 15 per cent above market estimates that ranged between HK$11 billion and HK$17.2 billion.
“The project significantly expands the scale of the Lee Gardens portfolio and reinforces Hysan’s leading position in Causeway Bay ... The company believes Hong Kong will remain a major international city and benefit from China’s strong economic momentum,” said Irene Lee Yun-lien, who chairs Hysan Development, in a filing to the Hong Kong stock exchange on Wednesday evening.


Hysan Development, the biggest landlord in the city’s famous Causeway Bay shopping district, holds a 60 per cent stake in the joint venture and will pay HK$11.867 billion for the land, while Chime Corporation controls the remaining 40 per cent. The winning bid was enough to see off competition that included Hong Kong’s two biggest developers, Sun Hung Kai Properties and CK Asset Holdings.
“Such a high winning price shows that the developers are strongly confident in the commercial property market in the area,” said Thomas Lam, executive director and head of valuation and advisory at Knight Frank.
Hong Kong’s economy rebounded with stronger than expected growth of 7.8 per cent in the first quarter of 2021, the fastest in 11 year after a historic low a year ago when coronavirus pandemic took hold, according to data from the Census and Statistics Department.
The site, opposite the iconic Lee Garden Three, can yield a million square feet of gross floor area.
It is the first commercial plot to be tendered by the government in Causeway Bay since 1997, according to Knight Frank. Lam expects that the total investment for the office and retail project could reach HK$28 billion.


“This is a rare large-scale commercial project in the heart of the city. We are excited to have this opportunity to partner with Hysan, the most experienced developer in the district, to develop this project,” said Chinachem Group’s chief executive Donald Choi. “The project will have synergy with Hysan’s other Lee Gardens developments and the long-term prospects are encouraging.”
The potential value of the project will be enhanced by a proposed system of covered walkways joining it to Causeway Bay MTR station, Hysan said in the filing.
Currently, Hysan Development’s portfolio of retail, office and residential investment properties covers a total gross floor area of 4.5 million square feet, including Lee Gardens, which hosts Hermes and Chanel as well as Goldman Sachs as its office tenant.
The company said the project will boost the area of its commercial projects by 27 per cent and is expected to be completed by the end of 2026 or beginning of 2027.
Hong Kong’s office and retail property segments remain hobbled by an uncertain global economic outlook amid the coronavirus pandemic that could hurt demand as companies surrender office space and introduce flexible work arrangements to cut costs.
The Wan Chai-Causeway Bay area saw office rents tumble 25 per cent in April from a peak in June 2019, while in Central they fell 30 per cent in the same period, according to JLL.
The retail property segment in the city also slumped in 2020, with rental values of prime shopping streets in Causeway Bay falling between 40 per cent and 50 per cent, according to Knight Frank.
Sino Land bid for the parcel on Caroline Hill Road as part of a consortium that included Lifestyle International Holdings, Kerry Properties and CC Land Holdings.
Offers also came from Sun Hung Kai Properties (SHKP), CK Asset Holdings, Wheelock Properties and Link Reit, Asia’s largest real estate investment trust.


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Hong Kong property

Hysan, Chinachem’s HK$19.8 billion bid wins first plot of land in Causeway Bay to be auctioned by Hong Kong government since 1997

A joint venture set up by Hysan and Chinachem’s Chime Corporation won the plot on Caroline Hill Road for about HK$18,400 per square foot. Photo: Martin Chan

A joint venture set up by Hysan and Chinachem’s Chime Corporation won the plot on Caroline Hill Road for about HK$18,400 per square foot. Photo: Edmond So

Causeway Bay’s retail vacancy rate to soar, with one in 10 shops standing empty as Hong Kong’s street rallies enter their 15th week

General view of Russell street, Causeway Bay in Hong Kong on 18 September 2014.

People pass by burning debris at a road block during a protest in the Causeway Bay district of Hong Kong, China, on Sunday, Sept. 15, 2019. Tens of thousands of protesters marched through central Hong Kong, defying a police ban on a mass rally that had been planned for Sunday afternoon, forming a sea of black shirts and umbrellas as police warned them to stop immediately. Photographer: Paul Yeung/Bloomberg

Demonstrators march along Hennessy Road during a protest in the Causeway Bay district of Hong Kong, China, on Sunday, Sept. 15, 2019. Tens of thousands of protesters marched through central Hong Kong, defying a police ban on a mass rally that had been planned for Sunday afternoon. Photographer: Kyle Lam/Bloomberg

graphic for online SCMP graphic map showing the march spilled over from its designated route into three neighbouring roads. 16JUN19 original protest route Sections of other roads protesters spilled onto Tamar Park End Tim Mei Ave point Legco Admiralty MTRstation 200m Wan Chai wan Chai MTR station Johnston Road Causeway Bay Gloucester Road Jaffe Road Lockhart Road Hennessy Road Victoria Park Causeway ßay MTR station Admiralty Tin Hau MTR statiom Start point SCMP

Flexible workspace giant IWG takes over US rival WeWork’s abandoned office space in Hysan Place, Causeway Bay

Exterior view of Hysan Place, Causeway Bay. Photo: Dickson Lee

The 31st floor of Hysan Place sits empty on May 12, 2020, after being fitted out in the format of WeWork’s flexible working centres. Photo: Pearl Liu

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The price is much higher than expected and shows developers’ confidence in the outlook for Hong Kong’s office market, analysts said
A joint venture set up by the two developers won the plot on Caroline Hill Road for HK$18,400 per square foot, the Lands Department said on Wednesday



The winning bid by Hysan Development and Chinachem Group is much higher than expected and shows developers’ confidence in the outlook for Hong Kong’s office market, analysts said.


Retail properties

Hong Kong economy

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