Hong Kong authorities have big plans for Hung Shui Kiu-Ha Tsuen New Development Area (Image: HKSAR)
A joint bid by Chinese e-commerce giant JD.com, Hong Kong builder Sino Land and four mainland developers won a tender for an integrated residential and tech park project near the mainland border with total investment in the development expected to reach HK$16.8 billion ($2.1 billion), according to an announcement by Hong Kong Development Bureau on Monday.
China Overseas Land & Investment, China Merchants Land, China Resources Land (Overseas) and CTG Investment joined with JD and Sino Land to win the rights to develop an 11 hectare (27 acre) site in the government’s Northern Metropolis initiative with a bid of HK$1.03 billion.
The tender award gives the consortium a 50-year grant for three residential sites expected to yield more than 3,000 units and a tech park site that can yield 50,950 square metres (548,421 square feet) of gross floor area. Managed under a two envelope process which judged bids for technical as well as financial appeal, the JD joint bid pushed aside one competitor to prevail in the tender.
“The successful tenderer scored higher than the other bidder under both non-price and price assessment criteria,” said the Development Bureau. Henderson Land Development placed the only competing offer for the project, according to previous local media accounts.
JD to Anchor Hub
Together with the mainland builders Sino Land will build an intelligent logistics centre on the tech park site in the Hung Shui Kiu-Ha Tsuen New Development Area, with JD to serve as the anchor tenant, according to the announcement. Known for operating one of China’s largest online marketplace, JD also invests in warehouses an other real estate through its JD Property division, as well as managing distribution centres through its JD Industrials unit.
JD.com chairman Richard Liu has been expanding his global footprint (Getty Images)
The tender award requires the consortium to begin operating not less than 15,300 square metres of gross floor area in the logistics centre within 55 months.
Vincent Cheung, managing director of Hong Kong-based Vincorn Consulting and Appraisal Limited, sees the consortium’s ability to bring JD.com into the project as a key factor behind its successful bid.
“JD.com has extensive experience in logistics, e-commerce, supply-chain management and digital platforms,” Cheung told Mingtiandi. “Its establishment in Hong Kong will help strengthen the local logistics and e-commerce ecosystem and attract upstream and downstream enterprises, professional talent and related investment.”
As part of the deal, the consortium will also undertake site formation works for three government sites within the project area developing public facilities.
Technical-Led Scoring
In evaluating the bids, the government gave a 70 percent weighting to non-price elements of the proposals and 30 percent weighting to price elements. Non-price assessment criteria focus heavily on development of the tech park site, including factors including strategic-industry development, anchor tenant attraction, development speed, investment scale and job creation.
Cheung said the tender award is likely to set a precedent for industrial land tenders across Northern Metropolis projects, with bidders’ ability to drive broader industrial development and deliver economic benefits potentially carrying substantial weight, instead of being judged on the price paid for the land.
“The model is expected to encourage developers to proactively identify reputable enterprises that can deliver tangible economic benefits and stimulate wider industrial development,” Cheung said.
Ramping Up in Hong Kong
JD’s win in the Northern Metropolis tender comes as the company has rapidly expanded its presence in Hong Kong in recent months.
Last month, JD agreed to acquire the Silka Seaview Hotel in Kowloon from Far East Consortium International for HK$750 million ($95.6 million) with plans to convert the property into student accommodation.
In December the Beijing-based giant struck a deal to acquire half of the 27-storey China Construction Bank Tower in Central district from Lai Sun Development and its parent company Lai Sun Garment for HK$3.5 billion ($449 million), with the company earmarking the property as its local headquarters.
Last August, JD announced completed its acquisition of local grocery chain Kai Bo Food Supermarket.
JD had not responded to Mingtiandi’s request for comments by the time of publication.
