A rare opportunity to buy a luxury residential site in an urban area led to an overwhelming response to the tender for the land in Shouson Hill yesterday.
The site attracted 16 bidders, while a residential plot in Tuen Mun received six bids.
Although the property market is weakening, the response to the Shouson Hill site was even better than another nearby luxury site, at Deep Water Bay Drive, which drew nine bids in 2012.
Surveyors valued the Shouson Hill site at between HK$2.45 billion and HK$3.07 billion, or between HK$28,000 and HK$35,000 per square foot.
"The response is very good. Since the competition is so strong, it may become the third most expensive site in Hong Kong in terms of price per square foot," said Vincent Cheung Kiu-cho, a national director of Greater China at consultant Cushman & Wakefield. "Developers prefer luxury residential sites in urban areas as the investment risk is lower. You don't need to worry about sales as demand is strong.
"Even if the market is weak, developers could keep the property for leasing and then sell it when the market recovers."
Cheung said a house on the site could fetch HK$75,000 per square foot in the future.
"Since the site is located in Island South, where housing supply is tight, price correction in this area would be less than other districts. It also has a higher upside potential in prices so we decided to join the tender," said Donald Cheung Ping-keung, a director at Emperor International.
The other bidders for the site include Cheung Kong, Sun Hung Kai Properties, Nan Fung Development, Sino Land, New World Development, Henderson Land Development, Kerry Properties, Wheelock Properties, Wing Tai Properties, Chinese Estates, Tai Cheung and K&K Properties.
The site, at the junction of Shouson Hill Road West and Wong Chuk Hang Path, has an area of 116,897 sq ft and could provide a maximum gross floor area of 87,673 sq ft.
The Tuen Mun site is at Tseng Choi Street, covering an area of 23,702 sq ft. It could provide 140 flats with a total gross floor area of 71,107 sq ft.
The site attracted developers such as Paliburg, Regal Hotels International, Sino Land and Far East Consortium International.
Since the winner has to build a residential care home and a day care centre for the elderly, surveyors believe it would affect the offer of developers.
They estimated the value of the site at between HK$270 million and HK$350 million, or between HK$1,800 and HK$2,300 per square foot.