Seven developers have submitted bids to redevelop the former North Point Estate site, the only one on the waterfront in Hong Kong Island's 'core area' being sold this year.
The bidders include almost all the big guns in the property sector - Sun Hung Kai Properties, Cheung Kong, Henderson Land Development and Wheelock Properties, while Sino Land teamed up with New World Development and K Wah International to bid for the site.
Nichole Wong, regional head of property research at CLSA, said the response showed developers are undeterred by the change in government despite fears in some quarters Chief Executive Leung Chun-ying would increase land supply to make property prices more affordable.
'We see Hong Kong's biggest developers have submitted their bids for the site on their own. It indicates their optimism in the market - it's a good sign,' Wong said.
Surveyors value the commercial-residential site at HK$7.21 billion-HK$8.46 billion, or HK$8,000 to HK$9,391 per square foot.
After submitting the joint bid yesterday, Quinly Wan Tsz-mei, deputy general manager at K Wah Real Estate, said: 'The consortium joined the bidding because there are fewer homes in supply in Hong Kong Island compared with other districts.
'And the site is rare in that it is on the sea and is close to North Point MTR station.'
The 251,875 sq ft site is behind the North Point Ferry Pier and can generate residential space of up to 577,812 sq ft and commercial space of up to 322,866 sq ft. Part of the site is currently used as a bus terminus, while the other portions have already been vacated.
Under land lease restrictions, the buildings on the site cannot be taller than 80 metres (about 22 storeys), as the site is on the waterfront. The project is also required to provide at least 700 flats.
Vincent Cheung Kiu-cho, national director for Greater China at broker and consultancy Cushman & Wakefield, said the winning bidder could build 600-700 sq ft flats and 900-1,100 sq ft ones.
'The demand for large apartments on Hong Kong Island is very strong,' he said.
Adrian Ngan, property analyst at Citic Securities International, said he did not expect the developers to make aggressive bids, as more big sites are expected to come to the market in the coming months. He said he did not expect the site to fetch more than HK$10 billion.
Alvin Lam, a director at Midland Surveyors, had also previously forecast that the site could fetch HK$10 billion.
However, he has revised that figure, since the winning bidder would also have to pay for rebuilding the bus terminus and other social facilities.
He now estimates the site could be worth about HK$8.15 billion.
The Lands Department released the site for tender on May 25. Tendering closed yesterday.
Number of flats the winning bidder must build on the 251,875 sq ft site, which could also generate up to 322,866 sq ft of commercial space