Big players think small at sale
Big developers dominated yesterday's land auction with Amoy Properties and Sino Land snapping up two residential lots for a combined HK$344 million.
The show of force by such key players as Sun Hung Kai Properties (SHKP) and Amoy Properties for the small sites raised eyebrows in the market.
Some analysts suggested developers might have been trying to bolster confidence in what is a fragile residential market as they usually focus on large sites.
The heightened interest came before Friday's tender of a prime residential site in King's Park Rise - seen as a real test of market sentiment.
Analysts said the sites auctioned yesterday - at prices within market expectations - were too small to serve as a barometer.
Bidding was better than the poor result at the April auction where a large residential site in West Kowloon sold at the opening bid of HK$1.9 billion to Cheung Kong (Holdings) and SHKP.
At yesterday's auction Amoy Properties outbid New World Development and SHKP to secure the Ho Man Tin lot for HK$251 million against an opening price of HK$230 million.
The price represents an accommodation value of HK$1,824 per square foot for the 15,291 square feet site which can provide 137,616 sq ft of residential and commercial floor area.
Sino Land paid HK$93 million for a 247,281 sq ft residential lot in Sheung Shui, which opened bidding at HK$80 million, after defeating two unidentified competitors.
The site can provide floor area of 98,910 sq ft with 26 houses, measuring about 3,800 sq ft each.
Ronnie Chan Chichung, chairman of Amoy and parent Hang Lung Development, said while the auction prices were reasonable the sites were small and would not greatly affect the general market.
Hang Lung Real Estate director Wilson Wong presented the winning bid for the Ho Man Tin site.
However, Victor Li Tzar-kuoi, deputy chairman of Cheung Kong - which did not bid - said the auction was not an indicator of the state of the market as the two lots were worth no more than HK$500 million.
Mr Li said the response could be considered 'okay' since they found bidders.
New World Development director and general manager Stewart Leung Chi-kin said it was considering joining partners to bid for the King's Park site. Surveyors predicted a price of HK$2.2 billion to HK$2.6 billion for the lot.
Assistant director of lands Alexander Paton, who conducted the auction, said it was 'sticky and slow' at the beginning of bidding yesterday but the result was satisfactory.
Mr Paton said the auction would be taken into account in determining the reserve price for King's Park Rise.
SHKP vice-chairman Raymond Kwok Ping-luen said the auction reflected a stable and positive market, adding that buyers' response to the group's current launch of Prima Villa in Sha Tin was strong. Mr Kwok expected an immediate sell-out when the project goes on sale on Saturday.
SHKP executive director Thomas Chan Kui-yuen said the sale prices for the two sites were a measure of the Government's confidence in the property market as they were close to the opening prices.
Mr Chan said apart from bidding for lots through auction and tender, SHKP had paid more than HK$10 billion in land premiums for private land grants or redevelopment in the past year.
