Keen interest in rare harbourside site

PUBLISHED : Saturday, 20 August, 2011, 12:00am
UPDATED : Saturday, 20 August, 2011, 12:00am


The government's latest tender of a commercial-residential site in North Point drew a total of six bids, demonstrating market confidence despite a poor auction result last week.

'It's quite an ideal response because this investment, including both the land price and construction costs, would amount to at least HK$10 billion. There are fewer than six developers in Hong Kong who can afford this amount, meaning that the tender may have attracted as many as 10 developers. This shows their confidence in the site,' Charles Chan Chiu-kwok, managing director at Savills Valuation and Professional Services, said.

Chan said the strong interest reflected the potential of the 84,896 sq ft land parcel in Oil Street on Hong Kong Island, which commands a view of Victoria Harbour. He said it also demonstrated developers' optimism about the outlook over the next two to three years.

He said short-term volatility in global stock markets had only had a small impact on local developers. According to Savills and six other surveying firms' valuation, the government could raise between HK$6.47 billion and HK$9.07 billion from the North Point site, which equated to between HK$8,562 to HK$12,003 per square foot.

Developers including Cheung Kong (Holdings), Henderson Land and Kerry Properties submitted their bids before the tender closed at noon yesterday.

Last week, the government sold a Sha Tin residential site for its opening bid of HK$5.5 billion, which was far below market estimates, sparking concerns over the property sector's underlying strength.

With a plot ratio of 8.9, the former government supplies depot at North Point has a total gross floor area of 755,633 square feet. At least 42.7 per cent of the floor area must be used for hotel purposes, while the rest can be used for flats or offices.

Chan Cheung-kit, director at Lanbase Surveyors, also said all developers capable of undertaking the project had submitted bids, showing the strong demand for the site.

Nam Cheong Property Development, a joint venture between the Kowloon-Canton Railway Corporation and the government, yesterday sought expressions of interest from developers in a site for building flats at the Nam Cheong MTR station.

The invitation came more than a year after the joint venture decided not to award a tender because of the poor response. Surveyors said they believed the Nam Cheong site would attract a good number of developers this time around because the site was on a railway line and had a sea view.