A government land parcel on The Peak could be about to set a new price benchmark for the city

A multi-week tender process that kicked off Friday for an exclusive government land plot on The Peak is expected to generate an important price signal for the real estate market in the final quarters of the year, and may even result in a new record in the city, according to experts.

The site, located on Mansfield Road on The Peak, with a gross floor area of 404,300 square feet, is expected to go for as much as HK$105,000 (US$13,378.2) per square foot.

That translates to a total price of more than HK$40 billion, making it the most valuable plot on record in Hong Kong.

“It will become the new land king,” said Thomas Lam, senior director at Knight Frank. “Available land in this upscale district is very rare and developers would be very aggressive in bidding for the site.”

The Peak and Southern District account for only 1 per cent of the total residential land supply in Hong Kong in the coming five years, according to Lam.

Major developers are expected to make bids, particularly those who are experienced in the ultra-luxury market, even as uncertainties such as the government’s proposed vacancy tax and tightening mortgage rates affect the longer term market outlook.