Luxury site with grave stirs lively bidding war

PUBLISHED : Saturday, 29 October, 2011, 12:00am
UPDATED : Saturday, 29 October, 2011, 12:00am


It seems nothing - not even the dead - could dampen developers' appetite for luxury property in Hong Kong.

The government tender for a small and upscale Repulse Bay residential site - on which there is a grave - has generated a warm response from developers, signalling their eagerness to acquire land in prestigious locations.

A spokesman for the Lands Department said the 14,402 sq ft site near 35 South Bay Road drew 12 bids by the time its tender closed yesterday. By contrast, a larger plot in Sha Tin, spanning 86,080 sq ft and located at the junction of On Yiu and On Kwan streets, received just one bid.

According to the land sale document, the Repulse Bay site has an abandoned low-rise building as well as a grave. The cost of demolishing and removing these structures will be shouldered by the winning bidder.

'The responses showed that developers' interest in luxury housing sites is not dampened by the existence of a grave on the lot,' said Ringo Lam Chun-chiu, valuation director at surveying company AG Wilkinson & Associates.

'Such a small site will not involve big amounts of capital and therefore it will attract a large number of developers,' he said.

According to Lam's estimates, the Repulse Bay site can command developer bids as high as HK$638 million, or HK$49,221 per sq ft. The Sha Tin commercial site, meanwhile, could fetch up to HK$860 million, or HK$1,998 per sq ft, the valuation director said.

Given the prestigious location and the fact the site commands a sea view, Lam says the Repulse Bay lot may even generate higher bids from developers or individual investors.

He said a four-storey block with 3,200 sq ft spaces on each floor or two houses could be built on the site, either for personal use or for sale. And in order to generate reasonable profit, Lam estimated the winning developer would need to sell the development project for around HK$60,000 per sq ft.

'Such a small site would likely attract quite a number of individual investors who will buy it for self-use,' he said.

The commercial site in Sha Tin could generate a total of 430,399 sq ft of floor space, making it an ideal location for a corporate backup office or headquarters, according to Lam.

In October last year, HSBC Holdings outbid six others in a tender to win a commercial site along On Yiu Street for HK$816 million.

The lender planned to build a new office there to augment existing administrative centres.