Tomorrow's auction of two small residential sites is expected to fetch between HK$365 million and HK$406 million. Despite their size, some analysts said the sale would serve as the latest test of confidence, especially for small to medium-size developers. Big developers are unlikely to compete for small lots, leaving mid-size developers to take charge in the third government auction this financial year. Developers and surveyors generally anticipated slow and cautious bidding due to the unfavourable market conditions. On the block are a 24,811 square foot site in Kowloon City's Sa Po Road, and 7,270 sq ft on Shek Pai Wan Road, Aberdeen. Surveyors predict the Sa Po Road site, with a developable floor area of 223,299 sq ft, will fetch between HK$290 million and HK$310 million. Predictions for the other site range between HK$75 million and HK$96 million. A pure residential development on the site will produce a total floor area of just 65,430 sq ft. But analysts expected the successful bidder to build shops on the lower levels, which could raise the total floor area to about 70,000 sq ft. New World Development senior development manager Andrew Choi Fook-ming said the two sites were too small for keen bids. The Kowloon City plot was comparatively attractive and he estimated it would fetch an average price of HK$1,400 to HK$1,500 per square foot while the other site could be worth HK$1,200 to HK$1,300 per square foot. Hon Kwok Land Investment managing director Herman Fung Man-hei and Tai Cheung Holdings chairman David Chan Pun were not interested in bidding because mass residential development was more risky. But Mr Fung would attend the auction to see how the market responds. However, Hong Kong Resort development and marketing general manager Chan Chi-ming said parent HKR International was interested in the Kowloon City site, given its location with open view and medium development capacity. He expected many developers would compete for the site. Vigers Hong Kong anticipated the auction could fetch up to HK$365 million. It expected the Kowloon City site to sell for HK$290 million, representing an accommodation value of about HK$1,300 per square foot. The Aberdeen site could be sold for HK$75 million. Assuming a plot ratio of 9.4 times, the site could be developed into a 68,338 sq ft residential project, and his estimate would represent an accommodation value of HK$1,097 per square foot. Research manager Albert Lam said the scale of both developments were relatively small and were not in prime urban areas, and so the auction results should not be taken as a prime market indicator. In April, the first land auction this financial year generated HK$2.97 billion from the sale of four sites in West Kowloon, Kowloon Tong, Sha Tin and Stanley. At the June auction, two small residential sites, including the North Point lot bought by Nan Fung, sold for a total of HK$422 million.