Nan Fung

Officials undeterred by lacklustre auction of site in Tung Chung

PUBLISHED : Thursday, 13 May, 2010, 12:00am
UPDATED : Friday, 08 May, 2015, 10:49am

The Tung Chung site auctioned on Tuesday was sold at 'market price' and the government will press on with measures aimed at increasing land supply, senior officials said yesterday after the sale received a lukewarm response.

The Nan Fung Group, which paid HK$3.42 billion for the site, said the lacklustre auction was 'relatively unusual'. The sale had been expected to raise between HK$3.6 million and HK$5.04 billion.

Nan Fung's managing director, Donald Choi Wun-hing, said: 'There were times in the auction when I was the only one bidding for the site.'

The Real Estate Developers' Association (Reda) rejected suggestions that developers had worked together to shun the auction in order to show their discontent at recent measures intended to curb property prices.

Reda vice-chairman Stewart Leung Chi-kin said the high cost might have deterred developers from bidding.

'There's no conspiracy. We just run a business.'

Tsoi also dismissed such speculation. 'I don't believe it. Developers work in the interests of their companies,' he said. 'They don't work together in a conspiracy. No one wants to earn less money.'

Only one other company, New World Development, took part in the auction. Nan Fung landed the site with its 16th bid after 32 minutes. The auctioneer warned 11 times that the site might be withdrawn because the offers were falling short of the reserve price decided by the government.

Leung said Reda had undertaken to observe the sales measures proposed by the government. They include requiring developers to build at least one accurate show flat, to let visitors to show flats take measurements and to release a price list at least three days before flats go on sale.

A spokesman for the Hong Kong Institute of Surveyors, Lawrence Poon Wing-cheung, said the conspiracy theory was to be expected since only two developers had taken part in bidding after several had indicated an interest in the site. Media reports showed that at least seven developers were interested before the auction.

Poon said the low auction price would discourage sales of existing flats, which developers would not want to see.

Chau Kwong-wing, a real estate professor at the University of Hong Kong, said the lukewarm response was partly caused by uncertainties in the property market.

'Apart from the government's active land sales, developers are not sure to what further extent the mainland government plans to control the property market - which will eventually affect Hong Kong,' he said.

Financial Secretary John Tsang Chun-wah said the auction price reflected the market situation, stressing the government would not sell sites under their market price. He declined to forecast the market reaction towards auctions in the future.

Secretary for Development Carrie Lam Cheng Yuet-ngor said the measures to increase land supply announced in February would not change. The government would continue with plans to put three sites in Fanling, Ho Man Tin and The Peak up for auction, she said.

Cold feet

Developers who had expressed an interest in the auction of the Tung Chung site:

Sung Hung Kai Properties

Henderson Land Development

Cheung Kong (Holdings)

Wheelock Properties


Nan Fung Group

HKR International

Developers who took part in the sale:

Nan Fung Group

New World Development