Quantitative Easing

Big players bid for Yuen Long site

The piece, near Long Ping MTR station could be sold for more than HK$1.9 billion, says surveyor

PUBLISHED : Tuesday, 16 October, 2012, 12:00am
UPDATED : Tuesday, 16 October, 2012, 4:03am

A residential site near Yuen Long's Long Ping MTR station, estimated to cost up to HK$1.9 billion, attracted eight bids from developers before tenders closed yesterday.

The eight bidders were among the 16 developers who submitted expressions of interest last month in acquiring the 106,564 square foot site on the north of the station.

The contenders include property heavyweights Cheung Kong, Sun Hung Kai Properties, Henderson Land Development, New World Development, Wheelock Properties, Lai Sun Development and K Wah International.

Ho Wai-kam, Wheelock Properties' senior manager of valuation and research development, said the company was interested because it is next to the mass transit station.

Although it is also close to an industrial area and there is an abundant supply of flats in the area, Wheelock believes the site still has potential.

New World Development said it bid for the site because it is upbeat about the development of Yuen Long and the project fits the firm's goals.

The site is in the Tung Tau Industrial Area and it could yield a total gross area of 523,938 sq ft.

Government restrictions mean it has to provide at least 832 flats, and 75 per cent of the units must be less than 538 sq ft.

Surveyors estimated that the site should be worth between HK$1.68 billion and HK$1.9 billion, or HK$3,200 to HK$3,600 per square foot in gross floor area.

"I think receiving eight bids is quite a good response, and it's within the market's expectations," Midland Surveyors director Alvin Lam Tsz-pun said. He estimated that the site would be sold for HK$1.9 billion.

"There are also some medium-sized developers competing for the site, and this is because the scale of the project fits their appetite, as it is not too large," Lam said.

Apart from the scale of the development, Lam said the third round of quantitative easing in the United States should also boost developers' sentiment in favour of land acquisitions as bricks and mortar were more sought after by investors to hedge against inflation.

Vincent Cheung Kiu-cho, property consultancy Cushman & Wakefield's national director for valuation, expects flats to be built on the site to be sold for between HK$6,800 and HK$7,000 per sq ft.