MTR Corp's first residential development along the Tseung Kwan O railway extension has received a better-than-expected response from developers after a substantial cut in land premium and recent market improvements. A tender for a joint venture with the MTRC received bids from seven developers. The HK$2 billion project, at Area 55b, is located at the Tseung Kwan O Station of the railway extension, the future town centre of the district. It involves four residential towers above a retail podium with total gross floor area of about 1.04 million square feet. Sun Hung Kai Properties, Henderson Land Development, Sino Land, New World Development and HKR International confirmed they had submitted solo bids for the project. Cheung Kong (Holdings) and Nan Fung Development also submitted bids but did not disclose whether they were solo. MTRC property director Thomas Ho Hang-kwong said the response was satisfactory, given the market conditions. Mr Ho said seven of the 13 developers who had previously expressed interest in the project had tendered bids. He said Tseung Kwan O had an abundant supply of residential properties but developers would still be interested in the district if land premiums were reasonable. The Lands Department earlier cut the land premium on the project to HK$620 million, representing an accommodation value of slightly less than HK$600 per square foot. This was a 40 per cent reduction from the previous HK$1 billion, or an average of HK$980 per square foot. MTRC requires a HK$50 million up-front payment from the winning developer to recover the bill for foundation work the corporation has already paid for. Sino Land associate director Eric Ip Sai-kwong said one of the reasons for Sino making a bid was the low land premium. He said the minimum profit-sharing ratio of 25 per cent required by MTRC was also reasonable. Mr Ip said Sino was quite confident of the property market's prospects and believed the low interest-rate environment would continue for some time, which would stimulate home-buying activities. He said the developer was not worried about the large supply in Tseung Kwan O given the high purchasing power. New World Development senior manager Andrew Choi said Tseung Kwan O was a convenient location and the property market was improving. Mr Ho said MTRC would keep tender conditions as attractive as possible in launching future developments. He said the corporation would release the Hang Hau Station development along the Tseung Kwan O line for tender in the first quarter or early in the second. However, it had not decided whether the project would be divided into smaller packages. It had not started negotiating a land premium for the project. MTRC was also aiming to release the Tiu Keng Leng Station development for tender this year, Mr Ho said.