Developer interest in two residential sites up for tender in Kai Tak this week is likely to remain keen, say surveyors, despite the condition that flats built on the sites may be sold to Hong Kong people only. The tender is the first under the "Hong Kong Property for Hong Kong people" scheme, and the sites are the first to be released for sale in the Kai Tak new development area. The tender closes on Friday. "Although developers may not sell flats built on the sites to non-local buyers, the local housing demand remains strong," said surveyor Albert So Chun-hin. "And the introduction of the buyer's stamp duty and doubling of existing stamp duties have already kept overseas buyers away from the property market." The buyer's stamp duty is levied at 15 per cent of a home's value and is payable by corporate and non-permanent-resident buyers on top of regular stamp duty. So said that, while developers would be interested in acquiring the sites, they would not enter high bids given the current market sentiment. The sites are in the centre of the Kai Tak development area and near the future Kai Tak MTR station on the Sha Tin-Central Link. Surveyors estimate they could fetch HK$3.96 billion to HK$4.4 billion, or HK$4,500 to HK$5,000 per square foot. "The area will be well connected with Central. And the sites are close to the waterfront, which is a very good location. Developers would be interested," said Vincent Cheung Kiu-cho, national director for Greater China at consultancy Cushman & Wakefield. He is optimistic about the outlook for the development of Kai Tak because the government plans to develop adjoining areas in East Kowloon into a new core business district. "The development density of the residential element in the area is also lower than in Tseung Kwan O. So the new housing supply would be lower," he said. Cheung believes the restriction on the sites will have only a limited impact on the offers submitted by developers. "The accommodation value of the sites is about HK$5,000 per sq ft. If the efficiency rate of the flats is 78 per cent, the average price of the flats could reach HK$12,800 per sq ft of saleable area," he said. Midland Surveyors director Alvin Lam said projects on the sites would face higher transaction costs and some of the terms were ambiguous. "Some developers may not join the tender and some would take these factors into account in their bidding. But the impact will be limited," he said. K Wah International chairman Lui Che-woo has said the group planned to join the tender, while Kerry Properties, Lai Sun Development and New World said they would study the terms before deciding whether to bid.