Two residential sites offered for sale this week by the government had attracted a combined 13 bids by the close of tender yesterday.
Seven developers bid for a 283,115 square foot site in Tseung Kwan O. The site enjoys a better view than a nearby plot sold to Wheelock Properties for about HK$2.45 billion, or HK$4,301 per square foot, in April. The block could be merged with an adjacent waterfront site for which tender closes on July 5. The site sold in April received nine bids.
Surveyors say when the results of the tender are released, possibly next week, the bids will range from HK$3.53 billion to HK$3.77 billion, or from HK$4,300 per square foot to HK$4,600 per square foot.
"Except for the two residential sites in Kai Tak sold to Chinese Overseas Land for better-than-expected prices in May, we have seen land prices falling," said David Ng Ka-chun, property analyst at Macquarie Securities.
"The prices of the Long Ping South and Ho Man Tin sites sold last week were below the prices paid for nearby sites."
Since the market outlook was uncertain, developers were unlikely to have bid aggressively for the sites up for tender, said Ng. "We believe home prices will drop by some 10 per cent this year and land prices will reflect this adjustment sooner or later."
The site, southeast of Tseung Kwan O MTR station, could yield total gross floor area of 821,035 sq ft and be developed into at least 840 flats. Sun Hung Kai Properties, Cheung Kong (Holdings), a joint-venture of Sino Land and K Wah International, New World Development, Wheelock Properties, Chinachem and a consortium comprising Regal Hotels and Paliburg Holdings submitted bids.
The timing of the tender coincided with comments from the United States Federal Reserve that a reduction in its monetary stimulus was drawing near. Vincent Cheung Kiu-cho, national director of Greater China at Cushman & Wakefield, said the reports about the Fed were unlikely to have affected bidding.
"The Tseung Kwan O site could be developed into a mass residential project," he added.
The second site up for tender this week, a 37,211 square foot plot on Wo Li Hill Road in Tuen Mun, attracted six bids. It could be developed into a low-density project, with a gross floor area of 48,374 square feet. The building height is limited to six storeys.
It was expected to have received bids ranging from HK$145 million to HK$210 million.