Mainland developer sets record price in Sai Kung

Two Hong Kong residential sites were snapped up by mainland developers paying top dollar, with one of the purchases setting a record for the highest per-square-foot price in the New Territories.

Chan Cheuk-yin, a vice-chairman of Guangdong-based Agile Property, bought a site in Pik Sha Road, Sai Kung, for HK$700 million.

With a maximum gross floor area of 32,787 square feet, the site was sold at HK$21,350 per buildable square foot, which breaks the existing record of HK$14,700 per square foot set by HKR International for a Sai Kung site in October last year.

China Overseas Land & Investment, one of the mainland's largest developers, won a 32,830 sq ft site on Ap Lei Chau with a price of nearly HK$2.54 billion, or HK$11,044 per buildable square foot. The site attracted 12 bidders and its maximum gross floor area is 229,811 sq ft.

This exceeded market estimates of about HK$1.15 billion to HK$2.2 billion, or HK$5,000 to HK$9,573 per square foot.

'The [Sai Kung] site will be used to build houses. It is a private project as the site was bought by our vice-chairman, Mr Chan, and not by the company,' said Agile's deputy general manager and company secretary Peggie Wai.

The HK$700 million price tag was as much as 113 per cent higher than surveyors' forecasts of between HK$328 million and HK$590 million, or HK$10,000 to HK$18,000 per square foot.

Chan, who could not be reached for comment yesterday, beat 17 other bidders to win the site, which has a height restriction of three storeys.

Alnwick Chan Chi-hing, an executive director of property consultancy Knight Frank, was surprised by the selling price. 'The buyer was very aggressive ... and the properties built on the site may be sold for HK$35,000 per square foot,' he said.

Improved market sentiment in recent weeks might have boosted both sites' selling prices, he said.

The Ap Lei Chau site is near the bridge linking the island with Aberdeen and is next to Sham Wan Towers, where second-hand flats are selling at more than HK$10,000 per square foot.

Du Jinsong, Credit Suisse's head of Asian property research, said the tender results showed mainland developers were optimistic about the Hong Kong housing market as austerity measures continued to bite on the mainland. 'It's because they think the Hong Kong market is better than the mainland,' he said.

While the two developers had invested in other Hong Kong projects, Du believed that other mainland developers would not follow suit because the housing market in Hong Kong differed from the mainland.

Centaline Surveyors director James Cheung King-tat said the Sai Kung site was in a luxury residential area while the Ap Lei Chau site was by the sea. The government had not imposed any restrictions on flat sizes and numbers, making them attractive to developers.

Properties built on the [Sai Kung] site may be sold for HK$35,000 per square foot Alnwick Chan, director, Knight Frank