Prime residential site expected to sell for HK$7.4b

PUBLISHED : Wednesday, 23 May, 2012, 12:00am
UPDATED : Wednesday, 23 May, 2012, 12:00am


Analysts expect keen competition among developers for a rare and large luxury residential site at Shouson Hill, with some forecasting the prime site could fetch up to HK$7.44 billion.

'This is the last available site of such a big size located in a traditional luxury area on Hong Kong Island,' said Alvin Lam Tsz-pun, a director at Midland Surveyors.

'It should attract a strong response from large developers or a consortium of developers.'

Lam estimated that the 110,319 sq ft site at 8-12 Deep Water Bay Drive, Shouson Hill, will be sold for HK$4.46 billion when the tender closes on Friday. This equates to HK$18,000 per sq ft in terms of the maximum gross floor area of 248,132 sq ft.

Three other surveying firms contacted by the South China Morning Post expected bids of up to HK$7.44 billion, or HK$30,000 per sq ft. The site, which offers a mountain view and is situated next to the South Island School, was triggered for public tender after it received a minimum guaranteed bid of nearly HK$3.59 billion, or HK$14,489 per sq ft.

There are presently three 14-storey buildings on the site, which were former government quarters named Glendale completed in the late 1980s.

Vincent Cheung Kiu-cho, national director for Greater China at property consultancy Cushman & Wakefield, said: 'The winning bidder can choose to demolish the buildings for new ones or just refurbish the existing units and construct a clubhouse, which may just cost about HK$500 million and can be ready for rent or sale within two years.'

Noting that 3,000 sq ft flats at nearby Pine Lodge on 10 Shouson Hill Road West were selling for about HK$33,000 per sq ft despite the fact that they were 33 years old, Cheung said developers would find it profitable if the site itself would be sold for HK$25,000 per sq ft, or nearly HK$6.2 billion in total.

A.G. Wilkinson & Associates' valuation director Ringo Lam Chun-chiu expected the site to attract between five and 10 bids, because of a lack of new homes in the area.

Another site up for tender on Peng Chau could fetch bids of between HK$6.5 million and HK$13.7 million, said surveyors, which would equate to HK$700 to HK$1,485 per sq ft for the 12,297 sq ft site.

The land parcel was triggered for sale after the government received a minimum guaranteed bid of HK$5.5 million, or about HK$596 per sq ft.

'The site is off the eastern coast of the island next to the beach and the sea, which is suitable for building holiday houses,' Lam said. With a maximum gross floor area of around 9,222 sq ft and height restriction of three storeys, he said the site could be used to build three three-storey houses.

But Lam added: 'It is not at a very popular location because it takes about 45 minutes to get there from Central by ferry, and another 15 minutes on foot to the site. So I think it will attract only two to three developers, including Sino Land as it purchased a site nearby recently.'

In March, Sino Land bought a 49,127 sq ft waterfront residential site at Peng Lei Road on Peng Chau for HK$19 million, or HK$516 per sq ft.

It was the first time in more than a decade that a residential site on the island had been bought by a major developer.