MTR Corp has invited bids for a 2.7 million square foot residential-retail project in Tseung Kwan O costing about HK$6 billion. The Tiu Keng Leng Station development - the largest private tender this year - will be a key test of developers' confidence in the fragile property market. Analysts expected only a few cash-rich developers such as Cheung Kong (Holdings), Sun Hung Kai Properties (SHKP) and Hang Lung Properties would bid due to the cost. The winning bidder has to pay the government a HK$1.02 billion land premium for the first phase and reimburse MTR Corp HK$770 million for foundation work and a shopping mall. The tender will go to the company that offers MTR Corp the biggest share of profits from the development - with a minimum of 25 per cent. Yesterday, MTR Corp property director Thomas Ho Hang-kwong said the tender documents for the project had been sent to all developers. He estimated the investment cost at HK$6 billion, with the project's two phases costing an equal amount. The first phase comprises 1.32 million sq ft of developable area and includes 1,676 residential units and a 180,000 sq ft shopping mall. Sources said the land premium charged by the government was HK$1.02 billion, representing an accommodation value of about HK$770 per square foot. That would be 10 per cent below the HK$850 per square foot premium set in June for a development at Hang Hau Station, another stop on the Tseung Kwan O line. A consortium of Sino Land and Kerry Properties outbid five rivals to secure the 1.5 million sq ft residential development at Hang Hau Station. Mr Ho would not comment on the amount of the premium for the first phase. The premium for the second phase has not been fixed. This phase comprises a buildable area of 1.4 million sq ft, creating 2,096 residential units. The developer would be free to choose when to negotiate the phase two fee with the government according to market conditions, Mr Ho said. He expected the entire development would take six to seven years. The successful bidder would have to accept the first-phase land premium by the middle of next month. Mr Ho said the tender schedule had been agreed by a committee formed by the two railway corporations, the Urban Renewal Authority and the Lands Department in order to regulate land supply. 'It will be the last tender from MTR Corp this year,' he said. The company had received expressions of interest from 16 developers, including Cheung Kong, SHKP, Swire Properties, Henderson Land, Wharf (Holdings), New World Development, Hang Lung Properties, Sino Land, Kerry Properties, Nan Fung Development and HKR International.