Hong Kong developers are becoming increasingly eager to boost their depleted land banks, with a residential site in Tseung Kwan O triggered for auction yesterday. Nicholas Brooke, the chairman of Professional Property Services, said that, with Sino Land and its consortium partners having snapped up all the big sites offered for auction over the past two years, other developers needed to stock up on land. Surveyors estimated the site near Tseung Kwan O MTR station could sell for close to HK$3 billion, or about HK$4,000 per square foot. Under the application list system, a developer triggers an auction if it proposes paying 80 per cent of the government's reserve price, which is not disclosed. The government said it had accepted a developer's minimum guaranteed bid of HK$2 billion, or HK$2,747 per sq ft, for the site. That will be the opening bid at the February 22 auction. It did not say which developer had made the bid. The site, next to Bauhinia Garden, covers an area of 132,397 sq ft and can be developed into a mass residential project with a total gross floor area of 728,185 sq ft. To avoid a development with too great a building density, the Planning Department has imposed a height restriction of 100 metres. The project is also limited to 880 units. According to data from Centaline Property Agency, prices at developments in the area - including Park Central, Tseung Kwan O Plaza and The Grandiose - range between HK$4,720 and HK$4,830 per sq ft. Ken Lee Yuk-cheung, a Centaline sales director in Tseung Kwan O, said the auction was good news for the local market. He predicted some homeowners planning to sell would hold off until the site sold because they could get a higher price if the land auction result was good. However, Alnwick Chan Chi-hing, executive director at Knight Frank, said the auction would have limited impact on the market. 'Developers are keen to acquire development sites and the new supply of residential land is limited, but it doesn't mean there is another uptick ahead in the property market,' he said. He expected the site could fetch HK$2.95 billion or HK$4,051 per sq ft. Brooke said the developer that triggered the auction targeted Tseung Kwan O because the government would accept a 'realistic' price for a site outside the city centre. He said much higher minimum bids were needed to trigger auctions for sites in central areas. 'The government would accept a lower price for sites in the New Territories and the investment risk for the developers is lower,' he said. Land auctions for sites in Tai Po last month drew bids from Sun Hung Kai Properties, Cheung Kong (Holdings), Kerry Properties, New World Development and Nan Fung Development. The sites went to Sino Land and its partner K Wah International. Sino Land has been the most aggressive bidder at recent government land auctions. The developer and its partners have spent more than HK$21 billion on sites in Tai Po and Aberdeen and on Lantau Island since September 2007.
