The support given to the luxury residential market by mainland buyers has encouraged a developer to trigger the sale of a premium residential site in Shouson Hill.
The government yesterday announced the site at 8-12 Deep Water Bay Drive in Shouson Hill and a low-density residential site on Peng Chau had been successfully triggered for sale. The government accepted the developers' minimum guaranteed bids of HK$3.589 billion or HK$14,464 per square feet for the Shouson Hill site and a bid of HK$5.5 million or HK$596 per square foot for the Peng Chau site. The sites will be up for tender on April 27, with applications closing on May 25.
'The government put the sites up for tender instead of the usual practice of auction,' said Alnwick Chan Chi-hing, head of valuation and professional services at Knight Frank. 'It showed they have a lack of confidence in the market and worry they will have to withdraw the sites due to the poor response at land auctions.'
The Shouson Hill site, which is close to South Island School and Carmina Place, is 110,320 square feet. It could provide a total gross floor area of 248,135 square feet. Under the land lease, the building height of the project cannot exceed 15 storeys.
Charles Chan Chiu-kwok, managing director at Savills Valuation and Professional Services, said the site was worth about HK$5.46 billion or HK$22,000 per square foot, while the site in Peng Chau is valued up to HK$9.22 million, or HK$1,000 per square foot.
The Peng Chau site on the east of the island covers an area of 12,298 square feet, which could accommodate a three-storey villa project with a gross floor area of 9,223 square feet. Sino Land bought a site to the west for HK$516 per square feet last month.
Chan of Knight Frank said the triggering for auction of the two low-density sites showed that developers are bullish about the luxury residential market. 'The supply of luxury flats and sites are limited. But the demand for luxury flats is strong due to the influx of mainland buyers. It's given developers confidence,' he said.
According to a report released by the Ratings and Valuation Department yesterday, more than 25 per cent, or 3,020, of the new residential flats to be completed this year will be large, with saleable area of 100 square metres or more.
That is nearly triple the 1,130 flats in 2011, but it will fall to only 1,340 flats, or about 9 per cent, in 2013.
The number of private residential flats set to be completed this year and next year will increase significantly to 11,890 and 14,930, respectively, after the annual figure plummeted by 30 per cent to only 9,450 flats last year, the department forecasts.
Due to abundant new supply in Sha Tin and Tuen Mun, the department said about 54 per cent of flat completions this year would come from the New Territories, but the proportion would jump to 87 per cent in 2013.
The government said flat prices rose 12 per cent in the final quarter of last year from the same period in 2010, while rents went up 8 per cent.
The Shouson Hill site is valued at this much, in Hong Kong dollars, or HK$22,000 per square foot