THE government land auction today has been seen as a telling test of property market confidence in the light of the recent strain in Sino-British relations. Although there still seems to be no sign of a breakthrough in the row, this afternoon's auction is expected to attract considerably more attention than that held last month. This is mainly because the four sites coming under the hammer are probably the best to have been put to auction for quite some time. Analysts expect the sites could fetch a total of about $1.55 billion. Ms Julie Baldwin, Colliers Jardine director of valuation, said yesterday: ''These are good sites and I don't think developers will pass them up. But we may see cautiousness as to how high they are prepared to go with their bidding. ''Bidding at the last auction was lukewarm, due mainly to political uncertainties between Beijing and London. ''Although the protracted problems seem little nearer to conclusion, the quality, size and locations of land should be of interest to developers.'' Mr Michael Clarke, managing director of Chung Sen Surveyors, said: ''There sounds as if there is a fair bit of interest there. ''There now seems to be an underlying confidence in the industry that the row will be sorted out and mortgage lending ratio restrictions will be lifted at some time.'' The largest plot for auction is a 113,021 sq ft residential site in Yuen Long. It has a plot ratio of three, which equates to 339,063 sq ft of maximum gross floor area. Experts reckon the site will raise between $450 million and $475 million, giving an accommodation value of about $1,385. Cheung Kong's Tin Shui Wai development in the same area sold exceptionally well when launched. This latest site is said to be even better located. But Mr Clarke said a nearby marble quarry meant there might be geotechnical or building complications. Higher bidding is expected for a 33,293 sq ft site in San Po Kong. The land is at the junction of Shung Ling Street and Yi Lun Street, near Kai Tak airport, and is designated for non-industrial use, which means the successful bidder can use it for residential, commercial and/or retail purposes. The lot is to be sold with the unusual stipulation that both a refuse collection point and public library be included in any new development. Owing to the wide variety of possible uses of this site, it is expected to fetch between $520 million and $850 million. Mr Clarke believes the site is well suited for land-banking. A developer may sit on the site and wait for maximum building height restrictions to be lifted with the pending airport closure. Ms Baldwin said: ''Given the slightly unusual requirements for this site coupled with the location, I would suggest the safest use would be for a residential development with a lower floor of retail accommodation. Under these circumstances, the site willonly go for around $520 million. ''However, a greater plot ratio is permitted as an office development and with current office prices, the lot is more likely to fetch $600 million. ''The area is not well suited as a decentralised office location and although bids higher than this are possible, up to $750 million, they carry a much greater risk and are less likely in the current market.'' A much smaller 15,016 sq ft residential site, opposite the Kowloon Cricket Club at Cox's Road is expected to fetch between $250 million and $265 million, giving an accommodation value of about $2,800 a square foot. The maximum gross floor area for this site is 94,599 sq ft. The fourth site covers 9,860 sq ft and is at Tai Lin Pai Road, Kwai Chung, and is tipped to fetch $70 million to $74 million. This site has been designated for industrial-godown use with a plot ratio of 9.5, allowing a gross floor area of 93,646 sq ft. The value of this plot has been boosted by the fact that up to 75 per cent of the usable floor area can be used as ancillary office space - a much higher proportion than usually allowed.
