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Land auction price targets lowered

The government is expected to generate land sales revenue of between HK$1.3 billion and HK$1.9 billion from the auction of two low-density residential lots in Tuen Mun on May 29.

Some surveyors have lowered their price forecast for the sale of the two sites in the wake of the less than expected price paid for the West Kowloon site in the May 8 auction.

Lanbase Surveyors director Chan Cheong-kit had expected the two sites to fetch HK$1.66 billion, with accommodation value ranging between HK$3,502 and HK$4,000 per square foot. However, he has adjusted the valuations and expects the two sites to fetch about HK$1.34 billion, or about HK$3,000 per square foot.

Last month, surveyor Albert So Chun-hin had estimated the two Tuen Mun sites to see HK$1.56 billion or HK$3,500 per square foot. He now also expects them to garner HK$1.34 billion. 'Property prices could reach HK$5,000 per square foot after completion,' he added.

Most of the sites sold at land auctions in the past year sold at records on a per square foot basis making them even pricier than nearby completed flats.

'Developers would only offer a price for the site close to the property prices of new projects in the same area now, as they don't think property prices would increase 20 or 30 per cent in the next two to three years,' Mr Chan said.

He said average prices of units at Hillgrove, a low-density luxury project nearby, reached HK$3,000 per square foot. Property prices of new projects in the area may reach more than HK$4,000 per square foot. He expected the two sites in Tuen Mun to be worth about HK$3,000 per square foot.

Alnwick Chan Chi-hing, executive director of Knight Frank, did not change his price target for the sites. He said they could fetch HK$1.9 billion or HK$4,300 per square foot.

CB Richard Ellis executive director Andrew Ness believed that the two sites had potential to be developed into luxury residential properties with sea views.

'We can take the land sale results of the two Pak Shek Kok sites as references, due to certain similar locational features,' he said. As luxury residential premises in non-traditional luxury districts became more popular, he expected heated bidding in next week's land auction.

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