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HK$3b bid for Tai Po site triggers auction

Wheelock tries again to replenish depleting land bank by submitting initial offer

Wheelock Properties, which failed to acquire the last four sites it triggered for sale this year, has sparked yet another government land auction by offering a minimum bid of HK$3.08 billion for a Tai Po residential site.

The Lands Department yesterday announced that the offer of HK$4,310 per square foot by tycoon Peter Woo Kwong-ching's property development flagship for the waterfront site in Pak Shek Kok met the minimum requirement.

It said the 238,164 sq ft plot near the Science Park would be put under the hammer on September 17.

Surveyors expect the plot could fetch between HK$4.2 billion and HK$4.4 billion at the sale, at an accommodation value of as much as HK$6,158 per square foot, in line with the price for a nearby waterfront site acquired by the Sino Land-Nan Fung Development consortium in March this year.

In that auction, the syndicate acquired the site for HK$2.11 billion or HK$6,109 per square foot, a record high for the New Territories.

The site triggered for auction yesterday could house a low-density residential project with a maximum gross floor area of 714,492 sq ft.

According to development restrictions imposed by the government, buildings at the site should be no taller than 36 metres, which is about 10-storeys. One other condition stipulates that flat sizes should be at least 645 sq ft.

Alnwick Chan Chi-hing, executive director at Knight Frank, said that the new plot was worth HK$4.4 billion, since it had the potential to be developed into a luxury residential project.

He projected that the property's sale prices could reach HK$9,500 per square foot in gross floor area, excluding common areas, upon the project's completion.

Prices for flats at two luxury housing estates in the area - the five-year-old Constellation Cove and 15-year-old Deerhill Bay - range between HK$6,000 and HK$6,300 per square foot, said Chris Lo Chi-ho, a director at Centaline Property Agency.

Detached houses in these projects fetch from HK$8,000 to HK$12,000 per square foot, he said.

Wheelock Properties has been the city's most aggressive developer in triggering government land sales this fiscal year, beginning in April.

The developer was behind the calling of five out of the six land auctions this year to date as it struggles to increase its depleting land bank.

Analysts expect that Wheelock's biggest competitor for the new plot will be the Sino Land led consortium - comprising Nan Fung Development, K Wah International and USI Holdings which already bought two adjacent sites this year.

'Their construction costs for the new site would be lower than other developers so they can have higher affordability to bid for the site aggressively,' Charles Chan Chiu-kwok, managing director of Savills Valuation and Professional Services, said .

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