A luxury residential site in Repulse Bay fetched nearly HK$40,000 per buildable square foot yesterday, the second-highest price ever paid for government land in Hong Kong.
Tai Cheung Holdings outbid 10 other developers to win the 46,715 square foot site near 110 Repulse Bay Road for HK$1.668 billion, or about HK$39,673 per sq ft of maximum gross floor area.
The selling price is within five surveying firms' estimates of between HK$1.362 billion and HK$1.89 billion, or HK$32,395 to HK$45,000 per sq ft.
A site on Mount Kellett Road on The Peak - sold to Sun Hung Kai Properties in 2006 at a then world record price of HK$42,192 per sq ft - retains the crown for the highest price paid for government land in Hong Kong.
One analyst attributed the failure to break the record to today's economic climate.
'The reason it failed to become the most pricey site is there is more economic uncertainty now than in 2006,' said Vincent Cheung Kiu-cho, national director of valuation and advisory services at property broker Cushman & Wakefield.
'Also, developers do not want another record-breaking land sale, which may prompt the government to launch more cooling measures.'
Surveyors said the Repulse Bay site fetched a high price because it is a luxury residential area with a sea view and is known to many overseas and mainland investors.
'Small and medium-sized developers like Tai Cheung may think Repulse Bay is a well-known area, which makes it easy to market the flats to mainland buyers,' Cheung said.
The site has a maximum gross floor area of about 42,044 sq ft, and buildings are limited to four storeys.
Cheung expects the developer to build 10 houses of about 4,000 sq ft each priced at HK$60,000 to HK$80,000 per sq ft. Knight Frank executive director Alnwick Chan Chi-hing believes the houses could be marketed at between HK$60,000 and HK$70,000 per sq ft.
Cheung said a luxury residential site at Mount Austin Road on The Peak that is now on the land application list may challenge the highest price when it is sold.
Tai Cheung has been focusing on luxury residential developments and has actively bid for government sites in recent years but failed to win any.
The last time it won a government site was in 2002, when it paid HK$100 million for a luxury site at Cape Road in Stanley.
Meanwhile, Emperor Group won a residential site in Siu Lam, Tuen Mun, for HK$180 million, or HK$4,635 per sq ft. It outbid 11 other developers for the site, which has a maximum gross floor area of 38,837 sq ft. The price fell at the upper end of surveyors' forecasts.
Donald Cheung Ping-keung, executive director of the Emperor Group, said the company would spend HK$400 million to build about 13 luxury houses on the site. He said earlier that villas to be built there could be sold for about HK$15,000 per sq ft at current market prices.
Midland Surveyors' Alvin Lam Tsz-pun said the selling prices of the two sites were reasonable, and many bidders had been attracted by the possibility of building luxury villas.
The cost per month, in HK dollars, of renting a 4,200 sq ft seaview townhouse in Mount Kellett Road on The Peak