High-rise protests disrupt land sale
Paggie Leung and Yvonne Liu
Protesters failed to ruin the bidding at yesterday's government land auction, with a Hung Hom site sold at the upper end of market forecasts.
The auction at the Queen Elizabeth Stadium was disrupted several times by demonstrators lobbying against a high-rise New World Development project at Mei Foo Sun Chuen.
Their actions underscored growing community discontent against development policies in the city.
But neither the protests or new government restrictions on floor areas had any impact on developers' appetite for land, with the site going HK$1.525 billion.
The 20,470 sq ft site located at 7 Ko Shan Road was purchased by a consortium comprising Nan Fung Development and Wing Tai Properties. It was the fifth most expensive site in Kowloon and with a total gross floor area of up to 153,516 sq ft and costing HK$9,934 per sq ft.
Surveyors had forecasted the site would fetch between HK$1 billion and HK$1.53 billion, or HK$6,514 to HK$10,000 per sq ft.
The former Customs and Excise Service married quarters site wooed nine bidders in a heated auction which was disrupted four times by protesters. There were 88 separate bids in about 23 minutes, with Sino Group, New World Development, Chinachem Group, Kerry Properties, K. Wah International and Emperor International taking part.
The competition was left to the Nan Fung-Wing Tai consortium and a joint venture led by Chun Wo Development Holdings from the 37th bid at HK$1.26 billion.
'This is a reasonable market price,' Nan Fung's managing director Donald Choi Wun-hing said after winning the bid.
'I don't think this site has more restrictions than other sites. Every site has its own unique restrictions and opportunities. And this site has its advantage, including the future MTR station [nearby].'
Auctioneer Graham Martin Ross said it was too early to decide if restrictions should be imposed to stop protesters interrupting future land auctions.'I'm trusting that it will not become a norm to have disruptions of this type at every auction,' Ross said.'There obviously were disruptions but some of the bidders were very eager to bid and the result fell within the expectations of the upper end.'
The auction, the first land sale of this fiscal year, was repeatedly disrupted by Mei Foo Sun Chuen residents lobbying against the construction of a 20-storey block by New World Development on the estate.
They chanted slogans and raised handmade placards bearing the number 17, the stock code for New World Development, before they were asked to leave the venue.
Green Sense president Roy Tam Hoi- pong also interrupted the auction complaining about the auction of luxury residential sites which fuel the soaring property price. Another group of around 20 protesters requesting discounted monthly bus tickets also demonstrated at the venue after the bidding.
The Lands Department has imposed numerous development restrictions on the Hung Hom site, including limiting the building height of the development to 120 metres.
The project is also subject to the government's new rule requiring that features such as balconies, utility platforms and clubhouses - previously exempt from gross floor area calculations -should not exceed 10 per cent of the gross floor area of the development.
Choi said they were planning to build over 100 units - mainly three-bedroom flats -on the site with a construction cost of at least HK$600 million.
Nicholas Brooke, chairman of Professional Property Services, said the better-than-expectation result was due to the location and small development scale of the site, which appealed to many developers. 'The infrastructure of Hung Hom will be improved over the next few years with the development of the Sha Tin to Central Link. It will be much more accessible.
'Developers are estimating the improvement in infrastructure will increase property values,' he added.
Brooke is also optimistic about the sale of luxury residential sites in prime locations. The government will release two luxury sites in Mid-Levels East and Kowloon Tong for sale next month.
'People will be surprised by the outcome of the land auction and developers' strong appetite for the sites on the island, particularly in the Mid-Levels,' he said.
Charles Chan Chiu-kwok, managing director at Savills, estimated the selling price of the development has to reach HK$14,000 to HK$15,000 per sq ft to generate reasonable profit.
He believes the auction result will fuel the residential market and raise property prices further.
Land auction result
Address: 7 Ko Shan Road,Hung Hom
Site area: 20,470 sq ft
Max gross floor area: 153,516 sq ft
Opening bid: HK$900 million, HK$5,863 per sq ft
Winning bid: HK$15.25 billion, HK$9,934 per sq ft
Winning bidders: Nan Fung, Wing Tai