Sun Hung Kai Properties bought a residential site in Ma On Shan at the lower end of market expectations yesterday, in a sign that land prices in the New Territories may be dropping. The developer outbid 10 others and won the site for about HK$1.83 billion, or HK$4,241 per square foot, compared with HK$4,000 to HK$7,200 per square foot expected by the market. It is also nearly 18 per cent less than a nearby site Cheung Kong bought - at HK$5,160 per square foot - in 2012. "It not only shows developers are becoming conservative in land bidding, but also a sign that developers have reserve buffers in case property prices drop. Their offers may also have been affected by the US Federal Reserve's plan to raise interest rates next year," said Vincent Cheung Kiu-cho, a national director of Greater China at Cushman & Wakefield. SHKP estimates the total investment cost of the project for the new site at HK$5 billion. Meanwhile, a small residential site in Peng Chau was sold to Michael Chan Sze-ming, the son of Chan Cheuk-yin, a vice-chairman of Agile Property for HK$21 million, or HK$1,493 per square foot, also at the lower end of surveyors' estimates. Lai Sun Development deputy chairman Chew Fook Aun yesterday said the company remained interested in buying land even though interest rates were expected to rise next year. The company said underlying profit jumped 141.87 per cent to HK$178.5 million in the six months to January. Net profit plunged 68.34 per cent to HK$622 million because of lower property revaluation gains. The company plans to boost its rental income by 132 per cent by 2017. Lai Sun generated a rental income of HK$430 million from its investment properties for the past financial year to July. CCB Tower in Central was completed last year and is expected to contribute an annual rental income of HK$110 million to HK$115 million. A joint-venture project with Henderson Land Development in Tsim Sha Tsui will be completed next year. The two projects and a hotel development in Ocean Park are expected to boost rental income to HK$1 billion by 2017.