SHKP’s 9,700-unit Sai Sha project: can it be the next Taikoo Shing or Lohas Park?

Hong Kong’s biggest property developer Sun Hung Kai Properties (SHKP) is poised to launch flats in a mega residential project in East New Territories, but poor accessibility could affect the development’s chances of becoming the next Taikoo Shing or Lohas Park, according to an industry observer. The Sai Sha development in Shap Sze Heung, which sits between Ma On Shan and Sai Kung, will provide a total gross floor area of about 5 million sq ft – 4.7 million sq ft of residential and 288,000 sq ft of non-residential space. “The Sai Sha project is one of SHKP’s largest integrated developments in recent years, a vision that has taken decades to realise,” the developer said. SHKP is likely to launch the first batch of 781 flats in the Sai Sha project this quarter. The project was still pending presale consent approval from the Lands Department as of end-December, according to Xavier Lee, an equity analyst at Morningstar, adding that SHKP was likely to soon receive presale consent. Lee said that while SHKP’s investment in infrastructure and new bus routes should alleviate concerns on accessibility, the project’s location was still quite remote, “so demand would depend on the pricing”. “Improving connectivity and accessibility will be key to the success of this project,” he added. SHKP acquired farmlands in Sai Sha in the 1980s, submitting a development plan to the Town Planning Board in 1993. In 2017, it revised the plan to build 4,900 residential units with a gross floor area of 4.7 million sq ft, paying the government a record HK$15.9 billion (US$2 billion) in land premium. A planned golf course has been turned into Go Park, a 1.3 million sq ft integrated sports and commercial complex that opened on January 22, which could boost the saleability of the residential project. The Planning Department approved SHKP’s request to relax the project’s plot ratio in 2020, allowing it to develop around 9,500 housing units, which was later revised to 9,700. Meanwhile, the downturn in Hong Kong’s residential market has yet to end, as buyers remain cautious due to a continuous slump in home prices amid high interest rates. Lived-in home prices fell in December to complete three straight years of setbacks. Prices on the secondary market declined 0.65 per cent, following gains in October and November, according to official data. Prices weakened 7.13 per cent for the year, following a 15 per cent drop in 2023 and a 7 per cent loss in 2022. The 27 per cent cumulative drop over the past three years is the second-longest slump since official monthly records began in 1993. The 58 per cent crash from 1997 to 2003, during the Asian financial crisis and the dot-com blow-up, was the worst in Hong Kong’s housing market history. Mortgage applications fell by more than a fifth in December, according to data from the Hong Kong Monetary Authority (HKMA). Mortgages shrank by 21.1 per cent month on month to 6,306, the first monthly drop since September, the data showed. Shap Sze Heung is not connected by the MTR railway network, and is not part of the government’s future railway projects. Bus routes connecting the development go only as far as University and Wu Kai Sha stations, both in Sha Tin district, which means residents will need to use different modes of transport to get there. Traffic congestion also plagues the area, and parking spots are in short supply. Lee said that similar mega-residential properties in previously fringe areas of Hong Kong have benefited from improved connectivity, pointing to the 12,698-unit Taikoo Shing project in eastern Hong Kong Island. The first phase of the development was launched in 1977, but the area became more vibrant after the opening of the Tai Koo MTR station and the completion of an expressway connecting the area with the central business district in the 1980s, he added. Another example is Lohas Park in Tseung Kwan O. The area enjoys excellent connectivity, with the Lohas Park MTR station opening the same year as the first phase of the residential development. One can reach Kowloon East or Hong Kong Island from Lohas Park within 20 minutes via the MTR, Lee said. To tackle traffic jams in Sai Sha, SHKP spent heavily to widen Sai Sha Road, which the Planning Department required when it approved the application to nearly double the number of housing units in 2019. The company said it would also provide an additional 200 public parking spaces on top of the 500 currently available. Meanwhile, the developer said it was liaising with public transport operators to introduce more bus and minibus routes connecting Sai Sha and the University and Wu Kai Sha MTR stations. “As traffic to our park increases and residents move into our residential units, we will [ask franchisers to] gradually increase bus routes connecting this area,” said Cimmy Yuen Sinn-man, director of Hong Yip Service, SHKP’s estate-management arm. She added that buses connecting the area with West Kowloon, Tsuen Wan, Kwun Tong, and Sha Tin would be launched in future. SHKP is bulking up its land bank, successfully acquiring two land parcels in Sha Tin through the government land sale programme in the current financial year. The company’s land bank in Hong Kong stood at about 57.8 million sq ft as of June 30, 2024. About 13.3 million sq ft of residential properties were under development, which were expected to be completed gradually over the next six to seven years, according to its latest annual report.

SHKP’s 9,700-unit Sai Sha project: can it be the next Taikoo Shing or Lohas Park?

Hong Kong’s biggest property developer is likely to launch the first batch of 781 flats in the Sai Sha project this quarter