Ma On Shan site draws keen response but Peng Chau plot fails to excite

Peng Chau plot fails to excite developers as suburban areas fall out of favour

PUBLISHED : Saturday, 22 March, 2014, 1:30am
UPDATED : Saturday, 22 March, 2014, 1:30am

The tender for two residential sites in Ma On Shan and Peng Chau received sharply different responses from the market yesterday, in a sign that developers are less interested in suburban sites, given poor sentiment.

A spokesman for the Lands Department said the site in Ma On Shan attracted 11 bidders, but the small Peng Chau site received only three bids.

"I'm not surprised that the Peng Chau site received three bids as the housing demand is limited to local people on the island only and the construction cost is higher than that in inland [areas]," said surveyor Albert So Chun-hin.

Developers have to take on a higher investment risk for this kind of development under the shadow of a weakening property market. He said it clearly affected the interest of developers.

The Peng Chau site at Kau Yuk Road covers an area of 18,751 square feet and could provide a gross floor area of 14,063 sqft. It is worth HK$19.68 million to HK$30 million, or HK$1,400 to HK$2,133 per square foot.

The sites in Peng Chau attracted large developers such as Sino Land to join the bidding in 2012. But the developer was not present yesterday.

The last site in Peng Chau sold for HK$31 million or HK$2,153 per square foot in September 2012.

"The location of the site is far away from the pier and Tung Wan. The view of the site is poor. It affected developers' interests," said Vincent Cheung Kiu-cho, national director of Greater China at consultant Cushman & Wakefield.

Surveyors estimated the Ma On Shan site could range between HK$1.72 billion and HK$3 billion, or between HK$4,000 and HK$7,200 per square foot.

The 405,803 sqft site in front of Double Cove, a new residential project, could yield a maximum gross floor area of 430,560 sqft.

It attracted bids from Cheung Kong, Kerry Properties, KWah International, K&K Property and the joint venture of Paliburg and Regal Hotels International. The developers of Double Cove, New World Development and Henderson Land Development, also teamed up to join the bidding.

Quinly Wan Tsz-mei, general manager of KWah Real Estate, said the company joined the bidding as the site could develop a low-density project with landscape development.