Large and medium-sized developers have expressed strong interest in the bidding. Cheung Kong (Holdings) already has indicated its intention to team with affiliate Hutchison Whampoa to make a bid.

Citic Pacific, Hang Lung Development and Guoco Land also have separately declared interest in competing for the sites.

Surveyors are trotting out bullish views on the sales outcome of the two large residential sites, and analysts expect the auction results to give a further boost to the residential property market.

The 570,492 square foot residential site in Stanley is tipped to be sold for between $6.4 billion and $7.3 billion while the 79,675 sq ft site in Hunghom is expected to sell at between $4 billion and $5 billion.

According to the land sale particulars, the Stanley site will provide low-level buildings of not more than three storeys with a maximum total gross floor area of 428,880 sq ft.

Chung Sen Surveyors director Cheng Wing-ming said in view of the strong buying demand and high profit margins for detached houses, the winning developer could turn the site into a luxury development comprising more than 100 villas.

The development scheme was expected to be similar to the Redhill Peninsula project in Tai Tam, he said.

Taking into account the average $16,000-$17,000 per sq ft transacted price for detached houses in Redhill Peninsula, Mr Cheng said the accommodation value of the Stanley site could reach $17,000 per sq ft which, based on normal calculations, would mean a purchase price for the site of $7.29 billion.

A.G. Wilkinson & Associates assistant director Ambrose Liu Yuk-lun said the view from the Stanley site, which is on the southern tip of the Stanley peninsula and looks over Lamma Island, was inferior to views offered from luxury developments on The Peak.

Mr Liu forecast the site would be sold for $7.2 billion and total investment in the project, including the interest expenses and construction cost, would amount to $8.6 billion.

He said developers were likely to form separate consortiums because the site would demand such a large capital investment. Interested bidders are tipped to include major developers such as Sun Hung Kai Properties and Henderson Land Development.

Hongkong Land, which recently showed renewed interest in the territory property market, especially the luxury sector, also is tipped to be a potential bidder. The Jardine development arm bought a luxury property - Stanley Court - in July last year for $295 million.

Estate agents said the luxury residential sector's prospects were positive in view of the limited supply, so they expected bidding to be enthusiastic.

Hong Kong Property Services (Agency) forecast the Stanley site would be sold at $6.43 billion and the Hunghom site would fetch $4.45 billion.

Bullish analysts forecast a selling price for the Hunghom site of $5 billion or an accommodation value of $7,000 per sq ft. Mr Liu said the site would provide two residential towers, comprising a residential area of 597,563 sq ft on top of a 119,512 sq ft retail podium.

The sale of the Hunghom lot has been deferred several times due to a dispute between the Government and developers over planning issues on Hunghom's waterfront.

The site is on the waterfront adjacent to Whampoa Garden and Laguna Verde, a new residential joint-venture project between Cheung Kong and China Light & Power Co. Laguna Verde flats recently have been fetching more than $10,000 per sq ft.

Mr Liu said Sun Hung Kai Properties was likely to bid for the site on its own.

He said Cheung Kong would team up with Hutchison Whampoa to bid for the site and Henderson Land Development would join its subsidiaries to enter the fray.

Medium-sized developers such as Lai Sun Development and Eton Properties are expected to form consortiums to join the bidding.

Also on sale at the auction on Tuesday is a small housing lot at Cheung Sha on Lantau Island.

Analysts are divided on their forecasts on the selling price for the 24,111 sq ft lot, which is tipped to fetch $11-$30 million.