Sun Hung Kai Properties (SHKP) expects to pay a land premium of about HK$1 billion for changing a hotel project at Olympic Station in Tai Kok Tsui into a residential development. Speaking after yesterday's land auction, SHKP executive director Thomas Chan Kui-yuen said the land premium was expected to be settled very soon. 'The Lands Department has asked us to hand in more information about the noise barriers and we are now waiting for their offer,' he said. 'I think the amount of the land premium will be within HK$1 billion.' The premium amount would represent an accommodation value of about HK$898 per square foot. The 210,000 sq ft site, the third-phase property development at Olympic Station, was originally designated for a 1,100-room hotel. SHKP, which won the tender as a partner with the MTRC, had already paid a premium of about HK$300 million in 1998 for the project. Last year the company secured Town Planning Board approval to change the land use from hotel to residential. Meanwhile, Mr Chan said SHKP was confident about the property market. Sentiment had improved as many new projects received strong responses. He expected prices would rise 10 to 15 per cent next year. Asked whether he supported the demand from some small developers for the release of more smaller residential lots, Mr Chan said it would be good for the market. SHKP paid HK$540 million for a residential site in To Kwa Wan at yesterday's government land auction.