Why did Hong Kong scrap The Peak land tender if it’s not in service of a high-price policy?
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Decision by Lands Department to remove Mansfield Road plot from tender may indicate the government is too focused on price as sentiment softens
Decision by Lands Department to remove Mansfield Road plot from tender may indicate the government is too focused on price as sentiment softens
The withdrawal of a luxury residential site at The Peak from the city’s tender last week has sparked concern about the government’s pricing strategy at a time of shifting market sentiment.
Analysts said that additional land sites could be withdrawn from tender for failing to meet the government’s reserve price, if officials persist with a high land price policy.
“The government may not have been sensitive enough to the changes in the market, that’s why it set a reserve price more aggressive than what developers expected,” said Joseph Tsang, managing director at JLL.
His comments came after the Lands Department announced last week it had rejected all five tenders received for the Mansfield Road plot, in one of the city’s most luxurious neighbourhoods, as “the tendered premiums did not meet the government’s reserve price for the site”.
As part of the tendering process the government does not publicly release its reserve price until the offer deadline has lapsed.
The Mansfield Road site, which could yield a total gross floor area of 404,300 square feet, was expected to fetch between HK$24.3 billion (US$3.1 billion) to HK$48.5 billion, or HK$60,000 to HK$120,000 per sq ft.