Big developers enter south Lantau, where luxury beachside homes are hard to find Cheung Sha, on south Lantau Island, has attracted developers' interest, with Sino Land making a higher than expected bid of HK$428 million for a site in the beach town at a land auction last week. Renowned for its tranquillity and sandy beach - the longest in Hong Kong - Cheung Sha is an attraction for many expatriates. However, the premium living environment offered by beachside properties in the area does not come cheap. Monthly rents for a 2,500 square foot house with a car park in Cheung Fu Street - where one can find most of the luxury houses on Lantau, such as Hongkong Land Holdings' Butterfly Crest - are about HK$45,000. Transaction prices for houses in the area range from HK$5,300 to HK$6,000 per square foot, comparable with some flats in Taikoo Shing, which offers the attractions of a minute's walk to an MTR station or a shopping centre but not the scenic views in Cheung Sha. Less than an hour's bus ride from Tung Chung or a 20-minute bus ride from Mui Wo pier, Cheung Sha may seem remote to be a premium housing area, but that may be part of its attractions and one of the reasons why Sino Land made a high bid for the auctioned site. 'I wish I could live here, but I don't think I can afford the rent,' Mui Wo resident Ban said, while waiting for a friend who lives in Cheung Fu Street to join him on a mountain biking trip. Outdoor enthusiasts can enjoy surfing, hiking or biking on Lantau; and the standalone, or semi-detached houses attract those who do not like high-rise buildings. In fact, most residents in the area are expatriates and many are airline pilots, according to Alice Leung, a property agent at Findley Leung, the oldest property broker on Lantau. The government and large corporates such as HSBC and Hang Lung Group keep holiday homes in Cheung Sha for their staff. But even buyers with the money to spend may find it difficult to acquire a property in the area, since rental or purchase transactions are rare because most existing residents have either bought properties for their own occupation, or are long-term tenants. Just two to three leasing transactions were recorded in the area in the last three months, said Ms Leung Also, new supply is limited in the area, another reason why Sino Land was intent on outbidding its nearest rivals for the site - Tai Cheung Holdings and HKR International - and now plans to develop the site with about 20 high-end houses of 4,000 to 5,000 sq ft each. The houses were likely to sell at about HK$10,000 per square foot, or about HK$40 million each, said Ms Leung. The few properties up for sale on Cheung Fu Street are all about 30 years old. The only new supply in the pipeline are 24 houses proposed by Tack Hsin Holdings, whose chairman Chan Shu-kit last year bought a site with a gross floor area of 24,111 sq ft in Cheung Fu Street for HK$14.5 million, or an accommodation value of HK$3,162 per square foot. Construction of the houses is yet to start. Against this demand-supply background, Sino Land's winning bid, which worked out to a land price of HK$6,749 per square foot, could translate into a selling price of more than HK$10,000 per square foot, said Kent Fong Chi-kit, a director of the investment department at DTZ. The latest land sale implied developers were bullish about the potential of the area, said Mr Fong, adding that rival developers had authorised DTZ to search for sites with potential in the district. In these circumstances, prices in the area could be driven up to between HK$6,000 and HK$7,000 per square foot, he said Last month, the Civil Engineering and Development Department opened a tender for a feasibility report on the private housing development of five sites with a total site area of 410,000 sq ft near Cheung Sha Sheung Tsuen. The sites are subject to a maximum plot ratio of 0.4, a maximum site coverage of 25 per cent and a building height of two storeys or 7.6 metres, for an aggregate gross floor area of 164,000 sq ft. 'Some conservation groups and expatriates will possibly object to the proposal,' said Mr Fong, who believed the unique environment was the major factor underpinning high prices, although this also meant that investors would have to be mindful of the area's uniqueness. 'The remote location and lack of support facilities make it a relatively small market,' said Koh Keng-shing, an executive director of Landscope Surveyors. Only two transactions in Cheung Fu Street have been recorded so far this year, compared with 10 in Marina Cove, a seafront luxury project in Sai Kung, according to data filed with the Land Registry. Road access restrictions between 8am and 6pm at Tung Chung Road, the only artery linking southern and northern Lantau, limits the accessibility of Cheung Sha. A highway linking San Shek Wan, about 2km east of Sino Land's site, and Tung Chung Road would help ease traffic flow when construction was completed in the first half of next year, Ms Leung said.