Sale of two sites may fetch up to HK$4.7b

PUBLISHED : Saturday, 13 October, 2007, 12:00am
UPDATED : Saturday, 13 October, 2007, 12:00am

Two public sites to be sold at a government auction on Monday could fetch a combined HK$3.6 billion to HK$4.7 billion, according property consultants.

The focus in the auction hall next week will be on the larger plot on the block, a 68,922 square foot site at Welfare Road in Aberdeen, which property consultants say would be a barometer for the confidence in the housing sector by developers.

Equity analysts and property agents have been forecasting a bull run for Hong Kong housing, estimating capital gains of as much as 30 per cent by the end of next year.

They expect that with limited new land supply on Hong Kong island, the Welfare Road site would reap strong transaction price ranging from HK$3.4 billion to HK$4.4 billion or 36 per cent to 76 per cent above the opening bid of HK$2.5 billion.

All the major developers are expected to bid for the land.

A smaller, 178,542 sq ft site on Lantau Island's Cheung Sha village also going on the block on Monday is expected to be sold at HK$260 million to HK$280 million.

Savills Valuation and Professional Services managing director Charles Chan Chiu-kwok said the Aberdeen site could be converted into a Class C residential site by the provision of private roads, which means the plot ratio could be increased up to 10 from eight. The road would reduce the net developable area by about 10,000 sq ft, leaving the plot ratio at 8.56, and the total gross floor area would be 590,000 sq ft, he estimated.

According to the terms, a maximum of 750 residential units can be built and the height limit is 110 metres, or about 35 storeys.

Mr Chan expected the site to be sold at HK$4.4 billion or an accommodation value of HK$7,500 per square foot. 'The average selling price could command between HK$9,000 to HK$10,000 per square foot upon completion,' he said, noting that the site could provide excellent seaviews.

Alvin Lam, director of Midland Realty's surveying division, expected the site would be sold at HK$4 billion on the basis of gross floor area of 620,298 sq ft.

He said sales outcome would be strong after Chief Executive Donald Tsang Yam-keung unveiled the planned construction of a seven-kilometre line connecting southern HK Island with the MTR network in his policy address on Wednesday.