A unit of HNA Group Co outbid Hong Kong developers, including Cheung Kong Property Holdings Ltd, with an HK$5.4 billion ($697 million) offer for government land in the former Kai Tak airport area, adding to a $1.1 billion winning bid last month for another site nearby.

It was one of the most hotly contested land tenders this year, with home prices near their record high in Hong Kong. The tender attracted 21 bidders including Hong Kong's Wheelock Properties Ltd and Sun Hung Kai Properties Ltd, as well as mainland buyers including China Vanke Co, according to a Lands Department announcement on Monday.

The deal is the latest overseas foray for Hainan-based HNA, which has spent more than $30 billion on a dealmaking spree this year. The company in November won a HK$8.84 billion bid for the first site in the Kai Tak area, the most paid for a piece of government land in three-and-a-half years. The site is designated for private residential development.

The price works out to HK$13,600 per square foot of saleable area, HK$100 more than what HNA paid last month. The cost, while expensive compared with other land purchases this year, is "a reasonable deal if they consider to merge the two sites together to develop a huge luxury residential project," said Thomas Lam, head of valuation and consultancy in Hong Kong at Knight Frank LLP.

Hong Kong's residential prices have rebounded from a six-month slump, despite government measures to cool the market. They are just 1.2 percent below their all-time high reached in September of last year.

HNA, led by aviation tycoon Chen Feng, operates airlines, hotels and tourism businesses and is pursuing an aggressive expansion to capitalize on an anticipated surge in Chinese outbound traffic.

Blommberg