MTR reopens bids for Tsuen Wan West site

PUBLISHED : Wednesday, 11 July, 2012, 12:00am
UPDATED : Wednesday, 11 July, 2012, 12:00am


The MTR Corporation yesterday retendered the Tsuen Wan West Bayside waterfront residential site, a day after it withdrew another site from tender due to poor offers.

The railway operator invited 14 developers - including Sun Hung Kai Properties, Henderson Land, Cheung Kong and Wheelock Properties - which expressed interest in the site last month to rebid for the project on or before August 8.

The retender process came about half a year after the MTR Corp withdrew the tender because the offers submitted by the four bidders last year was too low.

On Monday, the MTR Corp made its second withdrawal this year, pulling the Tai Wai site in Che Kung Miu Road from tender because the three bids received from Sun Hung Kai Properties, Cheung Kong, Sino Land and a consortium of New World Development, Nan Fung Development and Wheelock Properties failed to meet expectations.

'If the government hasn't largely lowered the reserve price of the Tsuen Wan site, I think the chance that it would be pulled from tender again would be very high,' said Vincent Cheung Kiu-cho, national director for valuation at real estate consultancy Cushman & Wakefield.

Cheung expected that developers' bidding appetite would be affected by the withdrawal of the Tai Wai site. He lowered the estimated price of the site to HK$8.38 billion, or HK$3,750 per sq ft, from HK$9.07 billion, or HK$4,061 per sq ft, earlier this year. His firm predicted last year that the site was worth about HK$10 billion, or HK$4,500 per sq ft last year.

Centaline Surveyors director James Cheung King-tat forecasts that the site will be sold for HK$7.37 billion, or HK$3,300 per sq ft.

The Bayside site covers 460,699 square feet and is next to the MTR station and Clague Garden Estate. The winning bidder can build nine towers with a total residential floor area of 1.8 million sq ft, and commercial floor area of 436,480 sq ft.

It can provide a total of 2,384 flats, of which more than half, or 1,235 flats, will be smaller than 538 sq ft. The site will go to the bidder offering the highest land price.

'The site withdrawals will certainly affect land supply and the government's flat supply forecast this year,' Cheung of Cushman & Wakefield said, adding that both the Tai Wai and Tsuen Wan sites could offer a total of about 4,500 units, which is equal to almost one-quarter of the government's annual target.

The government outlined in February that it expected the land supply for the financial year until March next year could be used to build 29,800 homes, 9,800 flats more than its annual target of 20,000 units.

Cheung added that MTR sites often involved complicated terms which deterred developers from bidding. For the Tai Wai site, the winning developer would have to pay part of the HK$12.7 billion land premium and give the MTR Corp a half-share of the commercial space.

The bidders were also judged on factors including the percentage share of profits from the project which they will allocate to the MTR Corp.

Joyce Kwock, research analyst at Credit Suisse, urged the government to come up with more measures such as facilitating the development process of agricultural land to boost the stable supply of flats.