A HK$1.22 billion residential site in Tseung Kwan O attracted bids from seven developers yesterday, signalling healthy interest despite concerns about the global economy.
Sun Hung Kai Properties, Cheung Kong (Holdings), New World Development, Sino Land, Wheelock Properties, K Wah International and Paliburg Holdings all submitted bids for the tender, although Alnwick Chan Chi-hing, head of valuation and professional services at Knight Frank, cautioned against reading too much into the response.
'I don't think their offers will be terribly high,' Chan said, adding that Tseung Kwan O would see a substantial number of new housing units in the coming years.
Data from the Rating and Valuation Department's Hong Kong Property Review 2012 indicated that about 88 per cent of all new residential flats next year will be in the New Territories, with Tseung Kwan O and Yuen Long together accounting for more than half.
'It's difficult for the winning bidder to sell the project at a significantly higher price. The project will be completed in 2015, by which time the interest rate cycle will be higher, so the market outlook isn't positive,' Chan said. The 54,099 sq ft site is close to the Tseung Kwan O MTR station and Evangel College. Surveyors estimated the block was worth between HK$1.19 billion and HK$1.22 billion, or between HK$4,000 and HK$4,100 per sq ft.
The site could yield a total gross floor area of 297,550 sq ft. Under the tender conditions, the site must be developed into between 360 and 378 units. It means the average apartment size would be about 716 sq ft.
The government has also imposed a building height of 100 metres on the site, so the developer will be able to build residential towers of between 28 and 33 storeys.
Chan put the value of the site at HK$1.07 billion, or HK$3,600 per sq ft.
Midland Surveyors director Alvin Lam Tsz-pun said the development scale of the site was smaller than the blocks previously released for sale.
'It's also close to the MTR station, which is attractive to developers,' he said. He estimated the site could be sold for about HK$1.19 billion, or HK$4,000 per sq ft. The neighbouring site was sold to Sun Hung Kai Properties for HK$1.033 billion, or HK$4,009 per sq ft in May.
The Wings above the Tseung Kwan O MTR station is the latest residential project in the area. It was launched for pre-sale in September 2009. Property agents said average property prices for the flats below the 30th floor were about HK$7,800 per sq ft, while flats on upper floors with a sea view sell for more than HK$11,000 per sq ft.