Strong developer interest in sites for flats, after record sale in Mid-Levels

Sha Tin luxury plot draws 10 bids after price for Mid-Levels flat sets Asia record

PUBLISHED : Saturday, 25 August, 2012, 12:00am
UPDATED : Saturday, 25 August, 2012, 8:12am

Two residential sites up for tender in Sha Tin and Peng Chau attracted strong interest from major developers yesterday, the latest affirmation of Hong Kong's buoyant real estate market.

The 212,051-square-foot site at Kau To Shan in Sha Tin, intended for luxury homes, drew bids from 10 developers, among them Sun Hung Kai, Sino Land, Wheelock Properties and a consortium formed by Wing Tai Properties and Manhattan Group. The 55,973 sq ft site in Peng Chau received eight bids.

The Kau To Shan site can yield a total gross floor area of 318,076 square feet, and the Peng Chau site a gross floor area of 55,973 square feet.

Property analysts said the market response was good, and expect the sites to fetch a total of as much as HK$450 million.

In the luxury residential market, a 6,200 sq ft flat in Swire Properties' Opus Hong Kong in Mid-Levels sold for a reported HK$470 million, making it the most expensive flat in Asia in terms of price per square foot and the second most expensive in the world after an apartment sold at One Hyde Park in London.

Centaline Surveyors director James Cheung King-tat said the response for the Peng Chau site exceeded his expectations.

"I think some of the developers are expecting to buy the site at a cheaper price, as the adjacent site was sold for HK$516 per square foot [to Sino Land] in March," he said.

Stewart Leung Chi-kin, vice- chairman of Wheelock, said his company had submitted an aggressive bid for the Kau To Shan site.

Vincent Cheung Kiu-cho, national director for Greater China at valuers Cushman & Wakefield, said the good response to the tenders may have been because of improving market sentiment.

Centaline Property Agency's Centa-City Leading Mass Index, which charts average sale prices at 85 large housing estates, showed prices for the week to August 19 climbed 0.35 per cent from a week earlier, pushing the index to a record high of 105.22.

But Lee Wee Liat, of BNP Paribas Securities, believes developers would not have been too aggressive in their bidding this week to maintain a safe profit margin.

"The government may release aggressive policies to cool down the property market," Lee said.