Swire Properties managing director Keith Kerr was also present, but remained a mere spectator.

Keen bidding came from across the board, in an auction room packed to capacity. Giant listed developers and smaller private developers were involved, giving a wide cross-section of industry sentiment.

The total amount bid for the four sites was $1.5 billion, 10 per cent more than analysts had expected.

The response to the last government land auction, held shortly before Christmas and soon after the political row broke out, had been pretty lacklustre.

Admittedly, the sites offered yesterday were far more attractive than the two small industrial lots available last month.

All but one of the four sites reached higher-than-expected prices.

The poor market reaction to the fourth site, a 113,021 sq ft plot in Yuen Long, may have been due to a nearby marble quarry which had caused fears over possible geotechnical or building problems.

The site was picked up at what analysts considered a bargain by a subsidiary of Sun Hung Kai Properties, after fighting off a challenge by Cheung Kong.

The lot was expected to fetch $470 million but went for $345 million, after bidding opened at $320 million.

Sun Hung Kai has built extensively in the area and probably knows the area better than anyone.

The most heated bidding came for the first lot to come under the hammer, a 15,016 sq ft residential site on Cox's Road, overlooking the Kowloon Cricket Club.

Emperor International (Holdings) beat off eight challengers and paid $360 million for the site which experts had thought would go for $265 million.

It is difficult to see how Emperor will turn in a reasonable profit at the price paid. An exceptionally high eventual selling price of $5,200 per square foot would be needed for the developer to make a normal profit.

Nan Fung outbid six challengers, including Cheung Kong and Sun Kung Kai, to acquire the third residential site, a 33,293 sq ft ''non-industrial'' lot close to the Kai Tak airport, in San Po Kong.

It paid $705 million, against market expectations of $600 million to $650 million.

Gasps were heard when the final site, a 9,860 sq ft industrial-office lot close to Kwai Chung was sold to a manufacturer for $100 million, well above the $74 million expected.

There was particular interest in this site because up to 75 per cent of the usable floor area can be used for ancillary offices, a far higher proportion than has been traditionally allowed.

The results showed that developers seem bullish about the luxury residential property market in urban areas, but less so for small flats in the New Territories.

Overall, the outcome served as very positive news for the stock market.