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Sandy Li

The government will put up for tender a small plot in Cheung Fu Street after a mysterious bidder matched the reserve price

Hot topic of the moment in Cheung Sha, Lantau Island, is not the tale of the high-flying HSBC banker and her Latin dance teachers who have fallen out over $120 million worth of lessons, but who triggered the auction for a small site in the area.

Last  week, the government announced a plot  in Cheung Fu Street will be put on sale next month after it accepted the minimum bid of $14.5 million or $1,500 per square foot from a developer.

The guessing game instantly spread around Lantau. Was it Hongkong Land Holdings, which built  Butterfly Crest, a development opposite  the auction site, who triggered the sale?

Or was it the mysterious buyer who paid $46.5 million for HSBC's Miami Garden?

Cheung Fu Street, one of the most luxurious addresses on the island, comprises villas ranging from  1,000 square feet to 2,500 square feet.

The news has raised interest in Cheung Sha, renowned for its long sandy beach, but so far, there has been no material impact.

'We receive a lot of inquiries from residents and outsiders about what  has been the market response from the news. But there has been no sign of an influx of people viewing flats at the moment,' said Alice Leung, a property agent at Findley Leung, the oldest real-estate broker  on Lantau.

Unlike popular housing estates in the urban area, only a handful of houses in Cheung Fu Street have changed hands once in a while as most of them were sold to end-users.

There were now only four or five properties up for sale, Ms Leung said.

Transaction prices for houses in Cheung Fu Street ranged from $4,000 per square foot to $5,000 per square foot, she said.

She believes the highway between Tung Chung and Cheung Sha - expected to be completed by next year - would have a positive impact on home prices in the area.

A 2,500 square feet house at Butterfly Crest recently sold for $9.4 million, and a 1,050 square feet villa changed hands for $5.03 million.

Last year,  a private businessman paid $46.5 million, or $3,404 per square foot, for HSBC's Miami Garden. The dormitory comprises nine houses with a total gross floor area of 13,660 square feet.

The new owner was now doing renovation work, including adding a recreation club at Miami Garden,  Ms Leung said.

After the makeover, Ms Leung said the houses would probably be offered for lease. Monthly rents in the area range from $20,000 to $40,000, depending on the  size and condition of the property.

'Almost 90 per cent of residents living there are expatriates who are pilots, senior police officers, doctors or lawyers. Some of them even work in Central or in Kowloon,' said  Ms Leung.

Pang Shui-kee, managing director of SK Pang Surveyors expects the site  to attract bids from small developers with projects in Lantau, and could fetch  as much as $20 million.

The winner  would have to sell the houses at about $3,000 per square foot to make a reasonable profit, he said.

The 24,111 square feet site, designated for private residential use, is up for grabs  after the original owner surrendered the plot to the government in 2001 after the lapse of a deadline for development.

The original owner had paid $40 million, or $4,147 per square foot, at a public land auction in 1997 during the market peak.

After  being left idle for five years, the site will be   put up for auction on July 18 after the government agreed to sell for a guarantee bid of $14.5 million.

Under the application list system, a land auction  is triggered only when the floor bid submitted by developers on a particular site from a list of pre-selected sites meets the government's undisclosed reserve price.

With a plot ratio of 0.4 times, the site will generate a total gross floor area of 9,645 square feet. The plot may be developed into a low-density residential project with about nine houses.



Just who triggered the auction of Cheung Sha site?