Lohas Park sale takes MTR closer to hitting homes target

The MTR Corp yesterday sold a site in Lohas Park to Wheelock Properties at the lowest price in 10 years in that area.

The sale of the 1,600-unit fifth phase residential project at Lohas Park puts MTR Corp on track to meet its land-sale target of providing 4,600 units for the three months to December.

Along with the sale of the 2,900-unit project at Tai Wai Station to New World Development in October, MTR Corp - under pressure by the government, its biggest shareholder, to release land to ease housing pressure - has sold enough land so far in this quarter to provide for 4,500 units.

"The lower land premium levy is the main drawing card to accelerate land sale," said Alfred Lau, an analyst at Bocom International.

The levy for phase five is HK$2.06 billion, or HK$1,874 per square foot, nine per cent less than that for the fourth phase in April, and the second-lowest since the first phase was offered for tender in 2004. MTR Corp had awarded the first phase of Lohas Park to Cheung Kong at HK$1,540 per square foot in 2004.

This April, Sun Hung Kai Properties won the fourth phase at a land premium of HK$2.71 billion, or HK$2,059 per square foot.

Wheelock was one of the six developers to submit a bid for the fifth phase on Monday.

Phase five could yield a gross floor area of 1.1 million sq ft, allowing three blocks of 1,600 units in total. It is expected to be completed in 2020.

Lau estimates total development cost would be about HK$6 billion, or HK$5,400 per square foot. Wheelock could break even if the project sells at HK$6,000 to HK$6,500 per square foot, he said. The going rate for existing units at Lohas Park is about HK$8,000 per square foot.