SHKP low winning bid points to falling land prices in New Territories
Developers secures site in Ma On Shan for HK$1.83 billion, near bottom of target range
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.
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.