A former airport in housing-hungry Hong Kong is becoming one of the city’s next big real estate developments.
The city has made HK$173 billion in selling land from the old Kai Tak Airport to developers, Bloomberg reported, citing figures from Savills Plc. Hong Kong expects the area to be redeveloped into a neighborhood with parks, stadiums, hotels, offices and 90,000 residents by the mid-2020s.
The old airport, roughly the size of New York’s Central Park, sits along Victoria Bay. It served as the city’s main international airport from 1925 to 1998, and was known for the proximity in which planes flew to apartment buildings; passengers could see in residents’ homes.
Now, developers are paying record prices for the prime real estate. Last week, China Resources Land Ltd. and Poly Property Group Co. paid HK$12.9 billion ($1.7 billion). Last year, Hong Kong-based development company Sun Hung Kai Properties Ltd. bought land for HK$25.2 billion. At $2,625 per square foot, a two-bedroom unit would likely ask $2.5 million.
Given the high prices, Thomas Lam, an executive director at Knight Frank LLP, told Bloomberg that the area probably will not emerge “as a particularly affordable housing location.” Hong Kong is already enduring a housing crisis, with the city even proposing spending $80 billion to create artificial islands on the South China Sea.
According to Knight Frank, the government could collect another HK$110 billion from sales of the land that remains available. [Bloomberg] – Mike Seemuth