Sun Hung Kai Properties yesterday made its entry into Tseung Kwan O's Lohas Park area, which has long been dominated by rival Cheung Kong, by winning the fourth phase of the residential development project.
Cheung Kong, the city's largest developer in terms of market value, acquired the first three phases of the project between 2005 and 2007.
It was also one of the three developers which submitted bids for the fourth phase on Monday. However, the MTR Corp preferred the terms offered by SHKP.
Analysts said SHKP's win was a surprise and it showed Cheung Kong had turned conservative in land acquisitions in the city.
Cheung Kong has not bought a site in Hong Kong since acquiring a residential plot in Ma On Shan in November 2012.
"It's in line with the company's recent strategy, which is selling assets in Asia and seek- ing investment opportunities in Europe," said Vincent Cheung Kiu-cho, a national director of Greater China at Cushman & Wakefield.
Investment risk in the property market and construction costs were also increasing, Cheung said.
SHKP is the largest landlord in Tseung Kwan O. Deputy managing director Victor Lui Ting yesterday said the firm would invest HK$9 billion to build a mass residential project on the site.
"The land premium levy of the site is more reasonable and the construction is simpler than the previous MTR Corp residential project. It could lower the cost and shorten the development period. We may pre-sell the project two years later," Lui said.
The levy is HK$2.71 billion or HK$2,059 per square foot, 15 per cent less than the levy for the third phase in 2007. The development covers almost 140,000 square feet. It could yield a gross floor area of about 1.32 million sq ft, allowing four blocks of 46 to 55 storeys with a total of 1,600 flats.
Meanwhile, the head of the Sales of First-hand Residential Properties Authority yesterday criticised some developers which promoted their new projects by initially setting lower prices and raising them later at the sales launch.
Eugene Fung said developers had abused the freedom they were given under the ordinance on selling new flats to make flexible business decisions. "It could cause public resentment," he said.
Fung urged developers to improve sale arrangements.
"Some developers arrange internal sales or 'sale to bulk buyers' sessions in the morning and open the sale to other potential buyers in the afternoon. It is difficult for potential buyers to know how many and which flats are left. They should arrange the sale for other potential buyers in the next day."