Surveyors have lowered their valuations for residential sites up for tender in Sha Tin and Wan Chai after another Sha Tin site fetched a disappointing price last week.
Land adjacent to the site in Kau To, Sha Tin, now up for tender - the last available in the area from the government's land sale programme - was sold to Chun Wo Development last week for HK$2.71 billion, or HK$8,382 per sq ft, which was at the lower end of market expectations.
The tender result suggested developers are taking a conservative approach to land acquisitions, said surveyors, who responded by lowering their valuations on the Kau To site from about HK$3.15 billion or HK$9,000 per sq ft to a range of HK$2.62 billion to HK$2.8 billion, or HK$7,500 to HK$8,010 per sq ft.
Gregory Tam, senior associate director of valuation and advisory services at property consultant Colliers International, previously forecast Kau To sites could fetch about HK$9,000 per sq ft. He now expects a top bid of around HK$2.8 billion, or close to HK$8,000 per sq ft.
Alnwick Chan Chi-hing, head of valuation and professional services at surveyors' firm Knight Frank, estimated the site was worth HK$2.62 billion, or HK$7,500 per sq ft.
"The property market is weak, particular the luxury residential market," said Chan. "Also, the development plot ratio is higher than it was for the previous site, which would affect its value."
He believes the 188,112 sq ft site in Kau To will still attract many developers to submit bids, but their offers would not be high. The site could yield a maximum gross floor area of 349,550 sq ft.
The second site up for tender near Ship Street in Wan Chai covers an area of 2,239 sq ft and could provide a total gross floor area of 11,195 sq ft once developed. The building height has been limited to 12 storeys.
Surveyors estimate the site could sell for between HK$784 million and about HK$110 million, or HK$7,000 to less than HK$10,000 per sq ft. Tenders for the two sites close on Friday.