Tuen Mun site set to test the resolve of developers
A low-density residential site being offered for tender in Tuen Mun is expected to sell for up to HK$3.76 billion, property analysts say.
The government released the site at Castle Peak Road in So Kwun Wat, Tuen Mun, for tender in December last year. The tender period will close on Friday.
The 722,770 square feet site is close to Cafeteria New Beach and the Gold Coast Hotel. It can be developed with a total gross floor area of 939,600 sqft.
Under the lease, the winning bidder must provide at least 1,100 flats, and the building height limits are 70 metres and 85 metres.
The winner of the tender will need to carry out air ventilation and visual impact assessments and submit a noise impact assessment for Environmental Protection approval.
Chan Cheung-kit, a director at Lanbase Surveyors, expects developer interest as the site is close to Harrow International School and the Gold Coast.
'The project will attract buyers once it is completed and launched in the market as many families would like to live close to the international school. Also, it would attract residents from Hong Kong to the Gold Coast,' he said.
He added that since the residential buildings on the Gold Coast have smaller flats, some residents may be attracted to larger units in a new development nearby. As a result, despite the clouded outlook for the property market because of the European debt crisis, he believed developers would still be interested in bidding for the site.
'It is a large development as the total floor area could reach about one million sqft. The development costs, such as foundation work, would be cheaper in terms of floor area, compared with small projects.'
Chan expected the site to fetch a top bid of around HK$3.29 billion or HK$3,500 per sqft.
Ringo Lam Chun-chiu, valuation director at AG Wilkinson & Associates, believed the site was worth about HK$3.1 billion, or HK$3,299 per sq ft, as weak market sentiment could dampen bidder enthusiasm.
'The winning bidder is required to submit a master layout plan, air ventilation assessment, visual impact assessment, and noise impact assessment to the government and this will involve complicated development procedures,' Lam said.
'The development period will therefore be longer and the development cost will be higher. Also, the property market has entered a downward cycle and there are many sites available in the market.
'So I think bidders are likely to submit conservative offers for the site,' Lam said.
Gary Fok, senior director of commercial property at Cushman & Wakefield, noted that the site was located in a sub-urban area and had no well-developed transport. He therefore believed it could sell for around HK$3.29 billion, or HK$3,500 per sqft.
The minimum number of units the government has set to be developed on a low-density site close to the Gold Coast Hotel