Property

In a hole

Wharf struggles with archaeological finds

Odd bedfellows: archaeology and property development

When archaeologists dug up evidence of a 1,000-year-old street in the middle of Chengdu two years ago, the first number they called was not the nation’s preservation department, but Wharf Holdings, the Hong Kong-based property developer.

Part of the Chengdu site – which mainland officials are now trumpeting as a leading archaeological discovery – is owned by Wharf. The company paid a record Rmb7.24 billion for the 53,850 square metres of land area in 2007.

The site in question is located in Chengdu’s expensive downtown area Hongxing Road, where Wharf is proposing to build Chengdu IFC, comprising a mega mall, top-grade office space, a five-star hotel and a luxury home complex.

But before the developer could start work on the landmark development, the Chengdu Municipal Institute of Archaeology began to unearth the Tang and Song Dynasty remains. These included 22 houses, a brick road, precious bowls, dishes, a stone statue of Buddha and a sophisticated sewage system – and all were buried beneath the proposed development.

Technically, only a sixth of the historical site is on Wharf land, says the South China Morning Post. But archaeologists counter that it still contains some of the more precious artifacts and so must be preserved at all costs.

The first phase of the development, the retail complex and one of the office towers, is now reckoned to be two years behind schedule – and won’t be completed till 2013.

But could this be an ancient blessing in disguise? Some industry observers think Wharf overpaid for the land in the first place, and so might use the delay in construction to renegotiate the land-sale agreement with the local government.

After all, the existing price paid makes it look difficult for Wharf to make a profit on the development. In terms of returns on the proposed accommodation, the Rmb16,500 (per square metre) costs are far higher than current transaction prices of Rmb10,000 (per square metre) for nearby luxury apartments.

There is a precedent too. Eight years ago, tycoon Stanley Ho returned a site to the Guangzhou government after the remains of a Qin dynasty shipyard were discovered, says Christopher Law, director at the Hong Kong-based architectural firm Oval Partnership. “Delays cost money and [Wharf] stands to dig deeper in its pocket,” says Law.

Chengdu – the capital of Sichuan – was an important commercial hub during the Tang and Song Dynasties. One of China’s oldest cities, it was also the first to adopt the widespread use of paper money.

It would be ironic if the act of digging up some of this ancient heritage led to a current-day refund for the Hong Kong developer.


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