Why did Wing Tai pull out of the Holland Tower en bloc deal

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Wing Tai Holdings has announced that its subsidiary Wincove Investment has pulled out of the en bloc purchase of Holland Tower, citing “non-fulfilment of certain conditions”. Set on a 21,878 sq ft freehold elevated site at 10 Holland Heights, a quiet road just off Queensway, the property is located in the prime district of District 10.Strict development controls must be adhered to due to the property’s location within the Holland Park Good Class Bungalow Area. URA rules stipulate a minimum setback of 34m within the area for a new condominium block, with no further intensification of the Gross Floor Area or number of dwelling units allowed.Given the restrictions, it may have been difficult for Wing Tai to meet their intended development plan for the new project. The developer had planned to create a luxurious condo with large-format apartments, and the land rate of $1,764 psf per plot ratio suggests some profit may have been made.However, the latest government cooling measures on April 27, with additional buyer’s stamp duty for foreigners doubling from 30% to 60%, has curbed demand. This could have been a contributing factor in Wing Tai withdrawing from the deal.This isn’t the first time a developer has pulled out of an en bloc purchase. Hong Kong-listed Shun Tak Holdings, for instance, withdrew from the en bloc purchase of High Point in December 2021, following the new cooling measures. It is believed Wing Tai may have already paid the 5% down payment for Holland Tower, due when the sales order was issued to the developer, and it will now be fully refunded.The episode at Holland Tower is likely to cast a pall on a collective sale market already in a downturn, and buyers and developers alike must remain vigilant to the changing market conditions.