Ho Man Tin site tender to mark new benchmark for Hong Kong’s luxury home market
13 bidders include developers from Hong Kong and mainland China
The Hong Kong government received 13 bids for a luxury residential site in Ho Man Tin when the tender closed on Friday, in what analysts said was a “not bad” response.
But they said it was too early to say if it was a good indicator of the market outlook until the winning bid was announced .
In the wake of the lower than expected winning bid for a residential site in Tai Po earlier this month, the market set its eyes on the price of the Ho Man Tin site. Located on Sheung Shing Street in the traditional luxury residential area, it is expected to fetch between HK$5.3 billion and HK$6.5 billion.
“The number of bids does not represent market sentiment,” said Thomas Lam, head of valuation and consultancy at property consultant Knight Frank. “How much they are willing to pay will reflect their projection for the luxury market outlook.”
The 97,700 sq ft site will provide a total floor area of 586,000 sq ft. Total investment cost will amount to more than HK$10 billion.
Lam said he had revised down his forecast by 25 per cent to 30 per cent to HK$9,000 to HK$11,000 per square foot or HK$5.3 billion and HK$6.5 billion after the Tai Po site sale.
The large government residential site in Tai Po sold for a surprisingly low HK$1,848 per square foot or HK$2.13 billion, providing evidence the government is willing to accept lower land premiums to speed up land sales in the city’s property market.
The sale triggered market expectations the government would sell the Ho Man Tin site at lower price.
Centaline Property Agency managing director Victor Lai said he expected developers would have offered conservative prices of around HK$10,000 per square foot, with the total price reaching HK$ 5.86 billion.
Big Hong Kong developers including Sun Hung Kai Properties, Sino Land, Henderson Land Development and Cheung Kong Property submitted separate bids yesterday, along with smaller Hong Kong firms such as Grand Ming Group.
The bidders also included mainland players such as Shimao Property and Country Garden.
Some bidders either have no experience in luxury residential project development or no footprint in Ho Man Tin, with analysts saying they were just trying their luck to see if they could win the site by submitting a below- market bid.
On Thursday, the government announced there would be 29 residential sites available for sale in the 2016-2017 financial year – enough for 19,200 flats. Secretary for Development Paul Chan Mo-po said on a radio programme yesterday that he hoped stable land supply would keep property prices from rising “too crazily”.