Small and medium-sized developers are less likely to win government land tenders in coming months, according to surveyors, who expect keen competition from larger developers for residential sites to be put on sale before October.
Secretary for Development Carrie Lam Cheng Yuet-ngor on Friday unveiled a list of eight residential sites that will be put up for tender between July and September.
Other than two small lots on Peng Chau, the sites are likely to fetch prices ranging from HK$1.57 billion for the smaller sites and up to HK$9.5 billion. They are spread across the New Territories, from Sha Tin to Tseung Kwan O, or in Yuen Long and Tsuen Wan, where two sites are above West Rail station projects.
Surveyors said these sites would prove too expensive for small developers, and their locations were not prime enough for them to develop luxury residential projects.
'As the government is expected to roll out more policies to provide subsidised housing in future, smaller developers have been focusing more on luxury residential properties which are supported by strong demand and offer higher profit margins,' said Ringo Lam Chun-chiu, valuation director for surveying firm A.G. Wilkinson & Associates.
Land parcels priced between HK$500 million and HK$1 billion would fit the appetite and budgets of small and medium-sized developers, Lam said, since they offered lower development risk than sites with higher lump-sum prices. But many of the sites up for sale between now and September were too large for small builders.
In the past few months, several small and medium-sized developers have shown new aggressiveness. CSI Properties beat 15 developers to buy a luxury residential site in Kau To, Sha Tin, for HK$531.5 million last week, or HK$10,550 per square foot of permitted gross floor area.