The latest government measures to curb speculation in the property market will not affect tenders for a residential site in Ho Man Tin and a commercial site in Tung Chung, surveyors say.
The focus will fall on the Ho Man Tin site, since it is one of the few large prime plots available. Surveyors estimate the site is worth HK$11.42 billion to HK$14.85 billion, or HK$10,000 to HK$13,000 per square foot.
Their valuations have not been affected by the doubling of stamp duties on properties worth HK$2 million or more, and tighter conditions for lending, announced on February 22 nor the scrapping last week of the land application list system.
Under that system, developers submitted bids for sites on the list. If a bid reached about 80 per cent of the government's undisclosed reserve price, an auction would be triggered. Now regular land sales will resume.
The 259,165 sq ft Ho Man Tin site is at the junction of Sheung Lok and Sheung Shing streets, next to the Ho Man Tin (South) Estate. The winning bidder can build a development 120 metres high and with a gross floor area of 1,142,168 sq ft.
The government released it and the Tung Chung site for tender in January. The tenders close on Friday.
Charles Chan Chiu-kwok, managing director at Savills Valuation and Professional Services, believes developers' offers for the Ho Man Tin site are likely to be pitched conservatively. "Property transactions have dropped. Developers have to factor in higher investment risk," he said.
Chan Cheung-kit, a director at Lanbase Surveyors, said that while the new measures would affect developers' offers for mass residential sites, as the future supply of these flats would rise it would not affect bids for the Ho Man Tin and Tung Chung sites.
"Ho Man Tin is a prime site. Developers could hold it for long-term investment purposes and do not need to sell the flats immediately. And the Tung Chung site is for retail and office development. Only two to three developers would be interested," he said.
Vincent Cheung Kiu-cho, national director for Greater China at property consultant Cushman & Wakefield, said the Ho Man Tin site was the only large parcel of land in the city centre available for luxury residential development in the land sale programme. "But I don't think it will attract strong competition from developers, as the land price would be more than HK$10 billion. They would be conservative in the bidding," he said.
Cheung noted that Sun Hung Kai Properties bought a residential site in Ho Man Tin for HK$12,539 per sq ft in 2010, and data from the Rating and Valuation Department showed the average price of a luxury flat rose by 30 per cent between 2010 and last year. "I don't think the price of the Ho Man Tin site would be cheaper than that of the site bought by Sun Hung Kai Properties four years ago," he said.
The Tung Chung plot covers 107,920 sqft beside Swire Properties' Citygate. The winning bidder can build a development 70 metres high with gross floor area of 539,599 sq ft. Height is limited to 70 metres.
Alvin Lam, a director at Midland Surveyors, estimated the site was worth HK$1.08 billion or HK$2,000 per sqft.