Developers show little interest in Tai Po residential site

PUBLISHED : Saturday, 24 May, 2014, 1:53am
UPDATED : Saturday, 24 May, 2014, 2:19am

Tenders for two residential sites in Kai Tak and Tai Po drew a mixed response yesterday.

A site in Kowloon's Kai Tak attracted 12 bidders while another one, in Tai Po's Pak Shek Kok, received only four bids. The performance of the latter was worse than the seven bids a nearby site received in March. That Tai Po site has since been withdrawn from tender as the offers failed to meet the reserve price.

"There's plenty of land supply in the New Territories. The poor response to the nearby site in March and the fact that a Tuen Mun site sold low recently dampened interest in the site," said James Cheung, a director at Centaline Surveyors.

"Those developers who have expressed interest will also submit conservative offers. The government may eventually withdraw this site from tender as well."

After the previous Pak Shek Kok site was withdrawn, surveyors have cut their estimate for the new site by 18 per cent to between HK$2.92 billion and HK$4.02 billion, or between HK$4,000 and HK$4,500 per square foot.

The site attracted bids from Sino Land, Cheung Kong (Holdings), Sun Hung Kai Properties and an unidentified developer. It has an area of 208,822 square feet and could provide a maximum floor area of 730,876 sq ft.

The Kai Tak site, on the other hand, received an overwhelming response and attracted Cheung Kong, Sino Land, Poly Real Estate, Wheelock Properties, New World Development, Chinese Estates Holdings, Far East Consortium International, K&K Property and a consortium of Regal Hotels International and Paliburg Holdings.

"The sites in urban areas are more attractive. So we joined the tender for the Kai Tak site only," said Anthony Chu, Far East Consortium's general manager for China property development.

Surveyors estimate the Kai Tak site is worth between HK$2.27 billion and HK$2.48 billion, or HK$5,500 to HK$6,000 per square foot.

The Kai Tak site is close to the upcoming Kai Tak MTR station. It covers 82,603 sq ft and could yield a maximum gross floor area of 413,015 sq ft. The developer who wins the bid would have to provide at least 630 flats, under the tender's clause.

"The Kai Tak site is in a prime location, close to a future MTR station, and is in the new development area," said Alvin Lam, a director at Midland Surveyors.

"Since the demand for flats in urban areas is strong, the investment risk for developers would be less than in New Territories projects. That's why this site received a better response."