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Concerns about having a hotel in Tseung Kwan O have kept many developers away from MTR Corp's multi-purpose project in the new town despite the land premium for the site being lower than the market expected.

Only four  of the 14 shortlisted developers submitted bids for the Tseung Kwan O Area 56 project by the time the tender closed yesterday. They were Sun Hung Kai Properties, Henderson Land Development, Wheelock Properties and a consortium led by Cheung Kong (Holdings), which did not disclose  its partner.

Thirty-six per cent of the site's gross floor area will be dedicated to hotel development, according to the scheme for the project, which will have two 36-storey hotel and office towers, with 1,290 guest rooms, and four 42 to 45-storey residential blocks with 1,150 units.

The high investment costs and risk of putting a hotel in a non-core area worried some developers, said Alnwick Chan Chi-hing, an executive director of property consultant Knight Frank in Hong Kong.

'Many developers may not be optimistic about the potential for a hotel in Tseung Kwan O,'  he said.

When the developers submitted their expressions of interest last month,  details of the project had yet to be disclosed, though the basic plan, including the hotel, had been announced.

The result of the tender will be announced shortly, according to MTR.

The project above Tseung Kwan O station, the centre of the area, has a site area of 430,452 square feet and could provide a  gross floor area of 1.8 million sqft.

As Tseung Kwan O is not  a core business district, surveyors expect the profit from the project to come mainly from the residential units rather than the offices and hotel.

Further down the line, MTR plans to release the development right for the third and fourth phases of the Dreamcity residential project in Tseung Kwan O in the third and fourth quarters respectively.

The third phase of Dreamcity will provide eight residential blocks with more than 3,000 units, while the development scheme of the fourth phase has not been confirmed.

Cheung Kong has been awarded the rights to develop the first two phases.



MTR project lures few bidders amid hotel business fears