News alert: Wins residential tender
- Secured a residential site in Sai Ying Pun via government tender
- Winning bid at the low end of market consensus
- Well positioned to fund this land purchase
K. Wah International beat 10 other rivals to secure a residential site (IL 8872) in Sai Ying Pun via government tender for HK$551m. This translated to an accommodation value of HK$12,820psf, which is at the low end of the market consensus. Located opposite the Tung Wah Hospital on Hospital Road, this site is 5-minute walk from Sai Ying Pun MTR Station. Upon completion, this project provides GFA of 42,979sf. K.Wah International plans to build a luxury project on this site.
Including construction and finance costs, we estimate total all-in costs at HK$22,500psf on a saleable area basis. With strong contracted sales of >HK$12bn in 1H22, K. Wah should have no difficulty funding this land acquisition. Given small project size, any NAV enhancement should be limited.