Surveyors lower valuation on Sha Tin residential site amid cooling measures
Developers are cold on residential sites, but hot bidding is expected for hotel site in North Point
Surveyors have lowered their valuations of a residential site in Sha Tin up for tender because of weakening market sentiment.
However, they remain positive about bidding competition for a hotel site in North Point.
The government released the residential site in Sha Tin's Kau To Shan and a hotel site in the former North Point Estate on the harbour front in front of Java Road Municipal Services Building for tender in January. The tender period closes on Friday.
"Developers have turned conservative on acquiring residential sites because of the release of new cooling measures by the government and the rise in mortgage rates," said surveyor Albert So Chun-hin. "They are likely to lower their bidding prices by 10 per cent in order to secure a higher profit margin."
The measures are already affecting the market and there is a noticeable decline in sales, he says. "Developers will monitor how the measures will affect housing demand and turn cautious at this stage."
"I've cut my forecast for the Sha Tin site from HK$1.37 billion, or HK$10,500 per square foot, to HK$1.24 billion or HK$9,500 per sq ft," said Vincent Cheung Kiu-cho, national director of Greater China at agency Cushman & Wakefield.
The cut was owing to conservative offers made for the residential site in Ho Man Tin sold last week, he said. It was sold to Kerry Properties for HK$11.69 billion, or HK$10,233 per sq ft - 18 per cent below the price paid for a nearby site in 2010 in terms of accommodation value.
However, Alvin Lam Tsz-pun, a director at Midland Surveyors, maintained his forecast of HK$1.3 billion or HK$10,000 per sq ft for the Sha Tin site.
"The development scale is not big. The tender for the nearby sites attracted many developers and investment funds to submit bids previously," he said.
In January, an adjacent site was sold to the joint venture of Wing Tai Properties and Manhattan Realty for HK$1.47 billion or HK$10,302 per sq ft.
The new site released for tender covers an area of 86,973 sq ft. It is located on the hill overlooking Chinese University. It could yield a total gross floor area of 130,460 sq ft. The building height has been limited to 227.5 metres.
The North Point commercial site located at the junction of Shu Kuk Street and North Point Estate Lane is part of the former North Point Estate. Because there are few remaining waterfront sites on Victoria Harbour available for sale, surveyors believe many developers will bid.
"It will not be affected by the cooling measures. Demand for hotel rooms is strong as the number of visitors continues to increase, and developers will be interested in the site," So said.
Lam, of Midland, estimated the site would be sold for between HK$2.52 billion and HK$2.71 billion, or HK$6,500 and HK$7,000 per sq ft.
The 57,792 sq ft site could provide a total gross floor area of 387,504 sq ft and be developed into a hotel project with retail space. As a waterfront site, the building height is restricted to 80 metres.