Hong Kong’s first Northern Metropolis pilot tender drew only two confirmed bidders on Friday, showing the challenge facing the government’s effort to enlist private developers in delivering not only homes but also its broader technology and industrial ambitions.
Henderson Land Development submitted the only stand-alone bid. Sino Land teamed up with four mainland developers and Chinese e-commerce giant JD.com in a consortium.
Three other major developers – CK Asset, New World Development and Sun Hung Kai Properties – did not participate. Sun Hung Kai Properties declined to comment. The other two did not respond.
They were deterred by more than Hong Kong’s prolonged property downturn.
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The Hung Shui Kiu pilot marks the administration’s first attempt to sell land under a model that requires companies to build an innovation ecosystem alongside residential projects.
Many in the industry say those responsibilities fall outside their expertise.
Unlike conventional land sales, the pilot adopts that model.
70 per cent of the bid assessment is based on non-price factors – including proposals to develop technology industries, attract strategic enterprises and create jobs. Only 30 per cent is determined by the land premium.
The framework shifts competition from price to ecosystem building.
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One executive at a major developer, speaking on condition of anonymity, said bidders had to evaluate far more than construction costs. They also needed to assess demand for specialised industrial buildings, fund public infrastructure and secure commitments from technology companies before the project was completed.
Officials have imposed detailed operating requirements, including ensuring designated businesses begin operations within months after completion.
The executive described those conditions as “very strict”.
Far East Consortium chairman David Chiu said the company approached manufacturers about jointly bidding for the metropolis projects but found little appetite to share development costs. “It is very difficult to structure a deal,” Chiu said. “Industrialists don’t know real estate, and we in real estate don’t know many industrialists.”
Alkan Au, head of value and risk advisory at JLL in Hong Kong, said the mild response “should not necessarily be viewed as a lack of confidence in the metropolis, as many major firms already have significant investments and land exposure in the area.”
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Au accepted that property firms were experienced in identifying residential demand, leasing commercial space and managing real estate assets. But, he said, “they are generally not operators of AI data centres, biotech research facilities, advanced manufacturing plants or universities.”
The six-month tender required participants to commit billions of Hong Kong dollars to a project where transport links, commercial activity and industrial demand could take years to mature. Such firms can pursue sites closer to existing MTR stations that offer quicker and more predictable returns.
Henderson and Sun Hung Kai recently applied to increase the residential component of two mixed-use developments near the area by adding about 1,830 flats while retaining commercial uses. They said additional housing would help create a more lively community and meet future demand.
The cautious market response comes at a critical stage for the metropolis, which has become the centrepiece of Hong Kong’s long-term development strategy.