Hong Kong developer pays $3bn for car park

Property developer Henderson has agreed to buy a five-storey car park in the Central district of Hong Kong for US$3bn, making it, in the words of the South China Morning Post, "the world’s most expensive commercial land plot".

The company, which is owned by one of Hong Kong’s richest families, was in a bidding war with the Chinese developers that have dominated the region’s property market in the past few years. In the end it beat eight rivals, six from Hong Kong and two from the mainland, for the 31,000 sq ft Murray Road site.

Because it attracted intense interest from property companies, analysts had expected the site to fetch between $1.8bn and $2.8bn.

Henderson will demolish the car park and replace it with an office building with a maximum gross floor area of 465,000 sq ft.

The company can be confident of finding tenants for its completed building – the commercial market in the Central district has a vacancy rate of less than 2%.

The purchase was Henderson’s first in two years.

Mainland Chinese real estate companies have bought a number of high profile properties in the past few years. In November 2015, Evergrande Group paid $1.6bn for a building in Wan Chai, the district to the east of Central, and in February this year two developers, Logan Property Holdings and KWG Property Holdings, jointly bought a 127,000 sq ft site on the south coast of Hong Kong island for $2.2bn.

All prices are in US dollars.

Image: The $3bn car park in Murray Road (Kenneth Tom). 

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