The HK$6 billion winning bid for the 110,320 square foot site at 8-12 Deep Water Bay Road, Shouson Hill, was within market forecasts of HK$4.46 billion to HK$7.44 billion. With a maximum gross floor area of 248,135 sq ft the site can generate, the selling price amounted to around HK$24,180 per buildable sq ft.

Although the price was slightly lower than Centaline's estimate, Lai said it was reasonable as the site did not have a sea view.

Also, as many huge residential sites were to go on sale in the coming months, some developers may be saving their capital, he said.

Donald Choi Wun-hing, managing director at Nan Fung Development, said the group would demolish the three 14-storey buildings on the land - former government quarters named Glendale - to build new houses and apartments. The group planned to invest HK$6,000 per sq ft on construction, Choi said, which would make the total construction cost around HK$1.5 billion.

'We may lease the properties, as we have done with many of our properties on the Peak,' he said, adding that there were not many new residential flats in Deep Water Bay. For the 12,298 sq ft site on Peng Chau, the price of HK$1,628 per buildable sq ft tripled that of another Peng Chau site that was sold to Sino Land for HK$514 per sq ft, or HK$19 million in total, last month. It also surpassed the estimates of HK$700 to HK$1,485 per sq ft for the site.

Ocean Gain Construction outbid large developers, including Cheung Kong Holdings and Sino Land. It could not be reached for comment.

'This site is located next to the eastern part of the island, with a sea view. But despite the view, the scale of this site is different from the one won by Sino Land earlier this year, which makes it difficult to compare,' Centaline's Lai said. 'Since the site is small and doesn't involve a high lump-sum amount, it is suitable for small developers and users. Therefore it is not surprising that they were willing to bid high.'