Wheelock Properties

HK$2b bid wins Tseung Kwan O site for Wheelock

Grass proves cheaper on its side of fence after paying 7pc less than rival paid for plot next door

PUBLISHED : Friday, 14 December, 2012, 12:00am
UPDATED : Friday, 14 December, 2012, 3:00am

Wheelock Properties has won its second site in Tseung Kwan O with a bid of HK$1.97 billion.

The Lands Department said the developer paid HK$4,580 per square foot - 7 per cent less than an adjacent site sold to Lai Sun Development and Walter Kwok Ping-sheung, a former chairman of Sun Hung Kai Properties, last month.

Yesterday's price was near the lower end of market expectations of between HK$1.94 billion and HK$2.12 billion. There were five other bidders.

Another residential site, at Kwun Chung Street in Jordan, went to small developer Rykadan Capital for HK$194 million, or HK$7,344 per square foot.

"Both prices are within my expectations," said Vincent Cheung Kiu-cho, the national director for greater China at property consultant Cushman & Wakefield. "It is reasonable that this Tseung Kwan O site is cheaper than the adjacent site. Lai Sun and Walter Kwok are a new consortium, so they had to pay a premium."

Cheung said Wheelock could achieve a reasonable profit if the average selling price reached HK$8,000 per square foot.

Wheelock's managing director Ricky Wong Kwong-yiu expects the flats to be sold at more than HK$10,000 per square foot. He said the firm planned to invest about HK$4.3 billion in the project, which would offer luxury flats of between 700 and 1,000 sq ft in size, and about a dozen houses of between 2,000 and 3,000 sq ft.

In January, Wheelock won another Tseung Kwan O site for HK$1.86 billion, or HK$3,810 per square foot in terms of gross floor area. This site, according to Wong, will offer small and medium-sized units.

Wheelock's new site could provide a gross floor area of 429,731 sq ft and at least 400 flats.

The Jordan site, which could provide a gross floor area of 26,275 sq ft, attracted 13 bidders.

Cheung said the average flat price had to achieve HK$13,000 per square foot to generate a reasonable profit. "It will be challenging to Rykadan, as it is a single-block development surrounded by old buildings," he said.

Meanwhile, 18 developers submitted expressions of interest yesterday in the Tsuen Wan West Station TW6 residential site, managed by MTR Corp.

The site could provide a residential floor area of about 675,000 sq ft. The winning developer could build two towers with 894 flats.

Surveyors estimate the site is worth between HK$2.64 billion and HK$2.9 billion.