Auction of two residential sites defy new bid to cool property market

Two residential sites have sold for higher-than-expected prices only two weeks after the government introduced new measures to cool the property market.

The Lands Department yesterday announced Sun Hung Kai Properties had won a Tseung Kwan O site for HK$2.545 billion, or HK$4,517 per square foot. That is about 7 per cent more than market expectations of up to HK$2.37 billion. The site was 3.94 per cent cheaper than the adjacent site sold to a consortium of Sino Land and K Wah International on September 28.

Another site in Ma On Shan was sold to Cheung Kong (Holdings) for HK$2.901 billion, or HK$5,160 per sq ft, 5.43 per cent higher than the maximum valuation of HK$2.76 billion.

Surveyors had cut their expectations by 10 per cent as they believed that the cooling measures released on October 26 would dampen developers' interest.

"The positive response to the sites showed developers believe the measures will not affect the sale of flats on those sites. The sites will provide mass residential housing mainly for local end-users," said Charles Chan Chiu-kwok, managing director at Savills Valuation and Professional Services.

The site acquired by Sun Hung Kai Properties near Tseung Kwan O MTR Station could yield a total gross floor area of 563,300 sq ft.

Company managing director Victor Lui Ting said the price was reasonable as it was close to an MTR station and enjoyed a sea view. It will spend HK$6 billion developing the project.