A commercial site put up for tender by the Lands Department in Kowloon Bay attracted 20 bids by yesterday's deadline compared with just six for a residential site in Tseung Kwan O, in a further sign of developers' response to government attempts to cool the housing market.
Swire Properties and Hopewell Holdings, which generally don't join any bidding for land, were among the developers who lined up for the Kowloon Bay site.
Others included Cheung Kong (Holdings), Sun Hung Kai Properties, Kerry Properties, Sino Land, Manhattan Realty, Wheelock, Lai Sun Development, Henderson Land, Regal Hotels International and Wing Tai Properties.
Commercial plots generally attract only six to eight bids, but in a role reversal, the Tseung Kwan O residential site received just six. Only seven joined the tender for another residential site in the district earlier this month.
Sino Land joined Wheelock Properties in tendering for the Tseung Kwan O site. Cheung Kong, Sun Hung Kai Properties, K Wah International, New World Development and Lai Sun Development also submitted bids.
"The new cooling measures have already affected the residential market. Developers flocked to the Kowloon Bay site as the commercial market has been left untouched by the government," said Vincent Cheung Kiu-cho, national director, greater China, at Cushman & Wakefield.
Thomas Lam, head of research at Knight Frank, said the outlook for the office market in Kowloon Bay is bright in view of the government's Energizing Kowloon East scheme. The scheme aims to develop the area into a new core business district.
"With the demand for office space strong, the vacancy rate of offices in Kowloon Bay has dropped to 5 per cent from 15 per cent three years ago. Average rent has risen 15 per cent this year. We expect it to rise another 10 to 15 per cent next year," he said.
Surveyors estimate the Kowloon Bay site, next to Exchange Tower, is worth between HK$1.4 billion and HK$2.5 billion, or between HK$4,200 and HK$7,500 per square foot. It could yield a gross floor area of 333,124 sq ft.
The residential site, located to the south of the Tseung Kwan O MTR station, could provide a gross floor area of 573,366 sq ft and is worth between HK$2.46 billion and HK$2.75 billion, or HK$4,308 to HK$4,800 per sq ft.