Alvin Lam, a director at Midland Surveyors, said: "The price, in line with market expectations, reflects developers still have confidence in the market outlook."

Wheelock chairman Stewart Leung Chi-kin said the company would spend HK$5.5 billion to HK$5.8 billion to develop the project.

"The project will be released for sale as early as within 2-1/2 years. The prices will be fixed at more than HK$10,000 per square foot," Leung said.

"We are interested in the site as it is one of the last few available in Tseung Kwan O."

The 149,856 sq ft site could provide a gross floor area of up to 569,459 sq ft.

The project has to provide at least 655 flats, according to regulations.

Wheelock now has three projects in the area - including its latest acquisition - which can provide gross floor area of more than 1.48 million sq ft.

The new office tower it sold to Manulife, the West Tower at One Bay East, is at 83 Hoi Bun Road. The development comprises two office towers - East Tower and West Tower.

The 21-storey West Tower, with a gross floor area of 512,000 sq ft will be renamed Manulife Tower and will serve as the headquarters for Manulife's Hong Kong operations.

The project is scheduled for completion in 2016. The insurance company plans to take occupancy in 2016.

Wheelock's managing director Ricky Wong said in a statement the company intended to keep the East Tower, which it would sell en bloc or by floors when the project "is closer to its completion".

Meanwhile, Smart Touch Investments, controlled by Raymond Law Ka-kui, a member of the family that owns Laws Properties, won a residential site in Tuen Mun's Fu Tei for HK$53.2 million, or HK$3,895 per square foot, which was also in line with market expectations.