Cautious bids expected for residential sites in Tuen Mun and Sha Tau Kok

Developers are expected to be cautious in bidding for two residential sites in Tuen Mun and Sha Tau Kok on Friday due to their poor location and weakening market sentiment.

Surveyors estimate the combined value of the sites may be between HK$470 and HK$644 million.

The 24,014 sq ft Tuen Mun site in Wu Hong Street, next to Yuet Wu Villa, could yield a maximum gross built floor area of 120,072 square feet. The winning bidder must build at least 220 flats and an elderly day care centre.

"The site is surrounded by public housing and Home Ownerships Scheme estates. And there is plenty of new housing supply in the district. Developers will be cautious in the bidding," said Vincent Cheung Kiu-cho, national director of Greater China at valuer's Cushman & Wakefield. Only a few developers were likely to bid for the site, which could be sold for about HK$372 million or HK$3,100 per sq ft, he added.

Patrick Chow Moon-kit, head of research at Ricacorp Properties, said the Tuen Mun site was far from the city centre of Tuen Mun and West Rail Station. "Its location will affect the value of the site, despite the fact that a project could offer sea views."

He forecast the site could be sold for about HK$330 million or HK$2,750 per sq ft.

The second site to be auctioned on Friday is in Shun Lung Street in Sha Tau Kok near Sha Tau Kok Chuen. It covers an area of 35,995 sq ft. It could be developed into a residential project with maximum gross floor area of 129,577 square feet. The building height has been limited to six storeys and the project must provide at least 240 flats.

"The site is located in the frontier closed area, which means only buyers with closed area permits will be able to buy for their own use. This will affect the value and upside potential of the site," Chow said, adding that the site could fetch about HK$194 million, or HK$1,500 per sq ft.

James Cheung, executive director at Centaline Surveyors, believed the site was only worth HK$130 million, or HK$1,000 per sq.

However, Cushman's Cheung said many developers could be interested in the site in the belief that the government might relax the closed area restrictions in two to three years.