Cheung Kong gets Yuen Long land for HK$2.4b
Cheung Kong (Holdings) outbid six other developers to snap up a residential site in Yuen Long for HK$2.41 billion. It was the first site in which the number and size of flats were spelled out for bidding.
The acquisition price is in line with the market expectations of between HK$1.95 billion and HK$2.5 billion. The land price is HK$3,629 per square foot.
'The site could have sold for 10 to 20 per cent higher if the government had not imposed restrictions on the number and size of flats,' said Charles Chan Chiu-kwok, managing director at Savills Valuation and Professional Services.
While the land price is cheaper, there are doubts whether first-time buyers will benefit.
Chan said the selling prices of the project would have to top HK$5,000 per sq ft to generate a reasonable profit.
'The entry level for a flat with a gross area of 500 sq ft at the project may cost HK$3 million or above. I wonder if first-time buyers could afford that,' he added.
The 1.234 hectare site is bordered by Yuen Long On Ning Road, Tai Kiu Road and Yuen Long On Lok Road. It can provide a total gross floor area of 664,139 sq ft.
To increase the supply of small and medium-sized flats, the government stipulates that at least 960 flats must be built on the site. Also, at least 800 of the flats should have saleable areas of between 375 sq ft and 430 sq ft, while the rest must be between 430 sq ft and 645 sq ft.
Despite the development restrictions, the site attracted seven bidders when the tender closed on February 18. The companies included Sun Hung Kai Properties, Sino Land, New World Development, Tai Cheung Holdings and China Overseas Land and Investment.
The government will release another five plots of land for tender under this scheme. The sites are located in Hung Hom, Tung Chung, Tsuen Wan and Yuen Long, and could provide a total of about 3,000 small and medium-sized flats.