THE smaller site at last week's government land auction - although eclipsed by the record $3.53 billion price tag on the huge Diamond Hill site - provides an indicator of market sentiment.
The Fanling Sheung Shui industrial site showed a 47 per cent rise in accommodation value (AV) on a similar site in the same area auctioned only seven weeks earlier.
Commentators are generally wary of drawing conclusions from a single sale.
There are differences between the two sites, notably the plot ratio.
And although the identity of the buyer remains a mystery, it is widely believed to be an end-user which would tend to mean a higher price.
Nevertheless, it is a significant increase, and at least indicates that the market has lost some of the jitters apparent in December.
''It's about as close a direct comparison as you'll ever get in property sales,'' said Mr Michael Green, assistant director of SG Warburg Securities.
The lot sold on December 15 fetched a price of $109 million, giving an AV of $345 per square foot.
Last Wednesday's $164 million price tag gave the Fanling Sheung Shui site an AV of $507 per sq ft.
Mr Lyall Alexander Webber, valuations director at Vigers, said there were two main factors involved.
This site had a lower plot ratio than the site that was sold in December: 2.5 compared to five.
Therefore the ground floor as a percentage of the whole was much larger.
The ground floor would normally sell for a higher price than other floors so the profit per square foot was higher.
The other factor was the difference in mood.
''There was considerable euphoria over the big site. Quite a few people were bidding.
''It was quite competitive. It generally reflects a more bullish market view than in December.'' Sentiment had been more constrained by the political strains in December. Now people had thought it through, he said.
The Chinese economy was a major consideration.
''Forgetting the politics and 1997, we are physically part of China.
''We are still the economic heart of southern China, which is the economic heart of the whole of China''.
There had been a lot of growth ''and we'll continue to be part of it''. It was a good location for cross-border industrial godown use, he said.
He said the nervousness apparent in the auction room in December had not been present this time.
However, the price was ''fully justified, particularly when you do the analysis: the greater percentage of ground floor represents greater profitability''.
Mr Green said the conclusion one could draw was that people were still confident in the industrial property market - probably more so than in other sectors.
The industrial sector had been the laggard: it had performed well last year but it had started to do so after the other sectors.
He said new industrial space was currently favoured, both industrial and industrial/office.
Much of the old godown space was coming to the end of its lifespan.
It had become obsolete as the type of tenants using that kind of space moved to China.
Now industries were ''cleaner'', as the environment became a concern in Hongkong.
The stipulations attached to the site allocated 30 per cent for office space, which in effect meant it would be an industrial/office building, a definite trend that has appeared.
The industrial sites that have come on to the market during the past 18 months have generally had at least a 30 per cent allocation for office space.