Henderson Land Wins Central Waterfront Project

Henderson Land Development was successful in the tender for the prized Central Waterfront site for HKD 50.8 billion. At 150,000 square metres, or 1.61 million square feet, in commercial gross floor area, this equates to HKD 338,700 per square metre, or HKD 31,500 per square feet. The valuation was at the middle of independent valuer Colliers' estimate in 2020. Given the location, restrictions, and requirements for the site, the tender process required submission of development plans. Still, the site attracted six tenders. While the site is likely to attract premium rents for the commercial space in office and retail, the site requirements are expected to add to overall investment in the project. This includes 21,200 square metres in noncommercial gross floor area, connectivity to the Central MTR station, and footbridges. Uniquely, the site is also expected to include the reconstruction of the old Star Ferry Clock Tower and the General Post Office. Height restrictions are applied to the buildings as the site is located at the Central foreshore. We have not factored the project into our forecast, and our fair value estimate of HKD 43.20 per share is unchanged.