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New World Development and Wheelock Properties have agreed to pay more than HK$9,100 per square foot for  MTR Corp's HK$18 billion Austin Station project in West Kowloon, signalling that they expect prices in the area to continue to soar.
MTR Corp  announced yesterday that the New World-Wheelock consortium won the tender for the luxury residential project above Austin Station.
The Lands Department has imposed a land premium levy of about HK$11.71 billion, or HK$9,130 per sq ft, for the site,  its most expensive land premium levy ever.   
'They [developers] are obviously expecting property prices for the project to hit a record  or they wouldn't have bid for the site,' said Wong Leung-sing, an associate director of research at Centaline Property Agency.
'The area will be the new city centre for Hong Kong. Every developer has to get a development project in the area. That's why developers were willing to bid aggressively for the site.' 
Nelson Chan Cheong-kit, a director at Lanbase Surveyors, predicted that property prices for the project may reach HK$20,000 to HK$30,000 per square foot when it launches. 
Stewart Leung Chi-kin, an executive director at New World Development, said the consortium had submitted two  profit-sharing proposals for the site based on two scenarios. One assumed the  MTR Corp would pay one third of the premium, and the second scenario assumed that New World and Wheelock would have to pay the premium between them. In the end,  MTR Corp chose to pay one-third of the premium. 
Including construction costs, interest expenses and profit sharing with the railway operator, the average land price for the site in terms of the gross floor area is higher than the current prices of the estates above Kowloon Station. 
Property prices above Kowloon Station jumped 50 per cent last year, the steepest jump in the area. 
It is the first project that New World Development has acquired in a public tender  since it won the tender for  MTR Corp's HK$6 billion Che Kung Temple Station in Sha Tin in April last year.
The luxury residential project will be built on  top of the new Austin Station in Canton Road, next to a golf driving range that will be redeveloped into a commercial project above the Guangzhou-Shenzhen-Hong Kong Express Rail Link at West Kowloon Station. The site covers 2.74 hectares and could be developed into a commercial-residential project with a total gross floor area of more than 1.28 million square feet. The project could provide 1,200 units.



Record land premium for MTR site