Tseung Kwan O site tipped to fetch HK$3b

PUBLISHED : Monday, 22 February, 2010, 12:00am
UPDATED : Monday, 22 February, 2010, 12:00am
 

The government may pocket more than HK$3 billion from today's auction of a Tseung Kwan O residential site.

But this outcome hinges on whether developers choose to keep their powder dry to tender for the construction of a luxury residential site above the Austin MTR station later this week, a market watcher says.

The Austin MTR tender will close on Wednesday and the total investment cost anticipated for the project is about HK$20 billion.

Surveyors estimated the site near Tseung Kwan O MTR station could sell for between HK$2.6 billion and HK$3.4 billion, or about HK$3,570 to HK$4,669 per square foot, depending on how aggressively developers bid for the project.

Among the big bidders who have declared an interest are Sun Hung Kai Properties, Hong Kong's biggest property company by market value; New World Development, Kerry Properties and K Wah International.

However, Chan Cheong-kit, a director at Lanbase Surveyors, says developers may not be aggressive in their bidding and keep funds to tender for the luxury residential site above the Austin MTR station.

'The Austin project is more attractive to developers,' Chan said. He predicted that the Tseung Kwan O site would be knocked down for HK$2.7 billion to HK$2.9 billion.

'Property prices of the project could reach about HK$5,600 per sq ft in terms of gross area when the residential project comes up for pre-sale,' he said.

The auction was triggered last month when the Lands Department accepted a developer's minimum guaranteed bid of HK$2 billion, or HK$2,747 per sq ft, for the site. This will now set the opening bid for the auction. The site, next to Bauhinia Garden, has an area of 132,397 sq ft and can be developed into a mass residential project with a total gross floor area of 728,185 sq ft.

To avoid over-density, the Planning Department has restricted the building height of the development to a maximum of 100 metres and has put a limit of 880 units on the project.

According to Centaline Property Agency sales information, properties on housing estates in the area including Tseung Kwan O Plaza, The Grandiose and Park Central changed hands at between HK$4,391 and HK$4,866 per sq ft last month.

This week's land releases continue a trend towards increased choice for developers in recent months. Also up for sale is the former government quarters at Caldecott Road in Kowloon. The government is offering 46 flats and 46 car parking spaces at the building, which represents 96 per cent of the 48-unit building. The remaining two units were sold to individual buyers many years ago.

The winning bidder of the tender has the option to renovate the units for resale or force the remaining two owners to sell their flats at auction in an attempt to acquire ownership of the whole building for redevelopment.

On the block

Estimated total investment cost for the Austin MTR station project, in HK$: $20b

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