What happened
Hong Kong's Lands Department on Tuesday awarded Kerry Properties a hillside plot on Fat Kwong Street in Ho Man Tin, Kowloon, for HK$4.31 billion, or roughly $549 million. Kerry is listed in Hong Kong and controlled by billionaire Robert Kuok.
The developer intends to build a pair of 25-storey residential towers with a clubhouse and parking. Government estimates suggest the site can hold around 250 flats, and units on the middle and upper floors are expected to look out over Victoria Harbour.
A price nobody expected
Ten bids were submitted. CHFT Advisory and Appraisal had expected something between HK$2.45 and 2.6 billion, and Kerry's offer came in roughly two thirds to three quarters above that. Alex Leung, the firm's chief surveyor, called the result a big surprise.
Measured against permitted floor area, Kerry paid HK$20,738 per square foot. Market forecasts had ranged from HK$11,800 at CHFT to HK$15,000 at Centaline. Kowloon has not seen housing land trade above HK$20,000 per foot since October 2021.
The losing bidders included some of the city's largest developers, among them Sun Hung Kai Properties, CK Asset, Hang Lung and Wheelock, while Sino Land and Great Eagle bid jointly. That level of competition for one plot says a lot about how little suitable land is available.
The site and its terms
The plot measures 55,650 square feet and allows a gross floor area of 19,300 square metres. It is not sold outright. Kerry receives a 50-year land grant, the standard arrangement in a city where the government leases out almost all land for fixed terms.
The developer must also deliver branches of an elderly care centre and a mental wellness centre, which do not count toward the floor area cap. The nearest MTR station is about a six-minute walk away.
Why the bid was so high
Leung puts the price down in equal parts to a shortage of luxury housing sites and to sentiment in the residential land market. He believes strong sales at Kerry's Mont Verra project in Beacon Hill gave it more confidence than rival bidders. He expects larger luxury units and estimates the scheme will need average prices near HK$45,000 per saleable square foot to earn a reasonable margin.
Supply is tight. The city's annual land sale list contains nine residential sites able to deliver more than 6,500 homes, and Ho Man Tin was the only new government housing tender in the July to September programme.
The site was previously zoned for government, institution or community use. In July, Development Secretary Bernadette Linn confirmed that the switch to residential zoning had been completed, creating a building opportunity in an established neighbourhood.
Kerry's position
Kerry has bought three other sites this year, taking land spending to HK$6.48 billion including Ho Man Tin. Hong Kong produced 81% of its first-half contracted sales, which edged up 1% to HK$5.6 billion, while mainland China sales dropped 88% to HK$1.3 billion. Its gearing ratio eased from 33.3% to 31.3%.
What it means for Bali
Hong Kong is a useful reference for a market built almost entirely on fixed-term land. Buyers and major developers pay top prices for a 50-year interest and judge a project by the length of the grant and the income it can produce in that window. Bali leasehold (Hak Sewa, a long-term land lease) works on similar logic: a foreign buyer acquires the right to use land, not ownership.
The second lesson is scarcity. What pushed the Ho Man Tin price up was the rarity of sites in a mature district with transport and services. In Bali, too, buyers pay for location, access and permitted land use, not only for square metres.