Tsuen Wan flat sales rise after waterfront site goes for high price

Home sales volumes in Tsuen Wan were boosted last week by bargain hunters betting that the high price paid for a waterfront site in the area would drive flat values higher.

The district was put under the spotlight when Vanke Property (Hong Kong), a subsidiary of the mainland's largest developer, China Vanke, joined local developer New World to buy the "TW6" site near Tsuen Wan West MTR Station for HK$3.43 billion, or HK$5,088 per buildable square foot last Wednesday.

The TW6 site could provide a total gross floor area of 675,000 square feet. The winning bid was 10 to 27 per cent higher than analysts' estimates, which ranged from HK$2.7 billion to HK$3.12 billion.

It was also 18 per cent higher than the HK$9.63 billion, or HK$4,308 per buildable sq ft, paid in August by Cheung Kong for the adjacent TW5 site.

Agents said the favourable land sale result triggered a 20 per cent jump in the number of transactions in Riviera Gardens and Luk Yeung Sun Chuen versus the previous week's sales.

"Existing home owners responded to the increased demand by marking up the asking prices of their flats by three to five per cent," said Dennis Chow, a sales manager at Midland Realty's Tsuen Wan branch. Prices of around HK$6,500 per square foot at Riviera Gardens - a 23-year-old development close to the TW6 site - were now considered to represent a bargain, he said.

"Once it is developed, flats on the TW6 site would have to sell for HK$8,000 per sq ft in order to cover costs. Therefore, secondary transaction prices at Rivera Garden were considered to be attractive by both end users and long-term investors."