New World Development (NWD) yesterday outbid six other major developers to win the right to build a residential estate, estimated by the MTR Corp to be worth HK$6 billion, above the Che Kung Temple mass transit station in Sha Tin. The project will brighten the developer's outlook, which until now, was clouded by the lack of large-scale urban projects in the next few years, according to UBS analyst Eric Wong. On NWD's portfolio are only four small-scale residential projects in Kowloon and on Hong Kong Island, in addition to the remaining units at Harbour Place in Hung Hom. Its projects in Tin Hau and the New Territories are pending agreement with the government on land premium and conversion. Mr Wong said the profit margin of residential projects in Hong Kong was usually more than 20 per cent. The Lands Department has imposed a land premium levy of HK$3.66 billion or HK$3,754 per square foot on the Che Kung Temple station project. Based on the terms of the tender, NWD, the winning bidder, will have to pay half of the levy and the construction cost. The railway operator will pay the rest of the levy. Charles Chan Chiu-kwok, a managing director at Savills Valuation and Professional Services, expects the project to fetch HK$7,000 to HK$8,000 per square foot. 'For potential buyers, the project is attractive as it is conveniently located above the MTR station,' he said. The 195,194 square foot site can be developed into four 38- to 40-storey residential buildings, offering 1,240 units with a total gross floor area of 975,810 sq ft. The project is scheduled for completion in 2012. NWD shares dropped 1.79 per cent to end at HK$17.56 yesterday. Separately, developer Yu Tai Hing has received two bids from the tender sale of Morning Side, its luxury residential project at 2 Cape Drive, Chung Hom Kok, sole agent Savills disclosed. Without divulging the development's price tag, sources said the owner would accept the purchase offer of close to HK$600 million. The development involves 11 houses, each measuring between 3,297 and 3,936 sq ft and featuring a private swimming pool. Nick Lee, an associate director for Island South and the Peak at Centaline Property Agency, said the going rental rate for houses of a similar size was about HK$150,000 per month. 'Rental rates will continue to rise as only a few houses are available now,' Ms Lee said, noting that monthly rents for houses have risen 20 per cent in the past 12 months.