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Elaine Chan

THE Government has been told it needs to lower opening bids at future land auctions by up to 30 per cent.

  An indication of the bearish sentiment looming over the market was the withdrawal of a composite industrial-office (I/O) site in Kowloon Bay at yesterday's government land auction.

  There was not a single bid.

  Another site at Cha Kwo Ling Road, Kwun Tong - designed for commercial use and car parking - suffered the same fate.

  Their withdrawal brought the number of Crown sites failing to sell at auction to eight over the past year.

  The aborted sale of the I/O Kowloon Bay site followed the failure to sell two I/O sites at last month's auction, one of which was also in Kowloon Bay, but about 83 per cent smaller in size.

  Analysts said the poor response was attributed to the high opening bids set by the Government.

  Bidding for the 135,518 sq ft Kowloon Bay site was opened at $1.5 billion and for the Kwun Tong lot at $480 million.

  Cheung Kong (Holdings) deputy managing director Albert Chow Nin-mow said the opening price of $922 per square foot for the Kowloon Bay site was 10 per cent lower than the price set in the previous land sale.

  'In the face of such market sentiment in the sector, the Government will fail to attract bidders unless it cuts the opening price by at least 30 per cent,' he said.



'Rethink needed' on opening bids