Hong Kong land tenders set to raise HK$4b

PUBLISHED : Wednesday, 19 June, 2013, 12:00am
UPDATED : Wednesday, 19 June, 2013, 5:48am

Bidding closes on Friday for two residential sites, in Tseung Kwan O and Tuen Mun. The plots are expected to generate about HK$4 billion in revenue for the government.

The Tseung Kwan O site is southeast of the Tseung Kwan O MTR station and covers an area of 283,115 square feet. A limited number of the flats to be built on the site will enjoy sea views as there is another residential site in front of the plot, which is coming up for tender next month.

Vincent Cheung Kiu-cho, national director of Greater China at valuers Cushman & Wakefield, believes many developers will be interested in acquiring the site as it could be developed into a mass residential project.

"It is easier for developers to sell mass residential when market sentiment is weak," he said. He expects the site to sell for about HK$3.69 billion or HK$4,500 per sqft.

"However, the introduction of extra stamp duties and the government's recent comments on cooling measures may lead to developers submitting conservative offers."

Earlier this month a non-official member of the Long Term Housing Strategy steering committee, Stanley Wong Yuen-fai, said more measures should be introduced unless prices dropped by at least 20 per cent. The comment raised some uncertainty, although Chief Executive Leung Chun-ying said last week that the government had no plans to revise existing measures.

Patrick Chow Moon-kit, head of research at Ricacorp Properties, said: "It's hard to tell whether the government's recent speech would affect the offers. But this Tseung Kwan O site was surrounded by other residential sites and not close to the MTR station, which would affect its value."

He believed it would attract a winning bid of about HK$4,300 per sqft. In March, a nearby residential site was sold to Wheelock Properties for about HK$2.45 billion or HK$4,301 per sqft.

Under development restrictions attached to the site it could yield a maximum gross floor area of 821,035 sqft and provide at least 840 flats.

Midland Surveyors director Alvin Lam Tsz-pun expects the flats to be built there can sell for more than HK$10,000 per sqft, similar to price of other new projects in the district.

The Tuen Mun site up for tender is on Wo Li Hill Road and covers an area of 37,211 sqft. It could be developed into a low-density project with a gross floor area of 48,374 sqft. The building height has been limited to six storeys.

"Residents at the project will not have sea views and there is no railway connection in the area. This will affect the value of the site," said Cheung, who estimated it would fetch about HK$145 million or HK$3,000 per sqft.

Lam said the site also would attract small developers. "Many developers would be able to afford the investment amount. I believe the site should be worth between HK$169 million and HK$193 million, or HK$3,500 to HK$4,000 per sqft," he said.