Great Eagle airs track record of market timing

Market watchers say Great Eagle Holdings' first purchase of land in the city in 25 years last month was more a case of grabbing a cut-price opportunity than a sign the market is looking up.

With major developers showing little interest in the 208,822 sqft Pak Shek Kok site in Tai Po, Great Eagle was one of only four bidders and snapped it up for HK$2.412 billion or HK$3,300 a square foot in terms of gross floor area, nearly half the price fetched by nearby sites in 2007.

"They'll be able to achieve a profit margin of 35 per cent based on current flat prices," one analyst said. "Even if the prices drop 15 per cent in future, they could still generate a reasonable profit of 20 per cent.

"They have good track record in terms of timing the market."

Vincent Cheung Kiu-cho, the national director for Greater China at property consultancy Cushman & Wakefield, said Great Eagle and other medium-sized developers were returning to the scene because large developers had become more cautious about acquiring land.

"Big developers used to be aggressive in land bidding and outbid mid-sized developers when the property market was booming [before the government's introduction of cooling measures in February last year]," he said. "But now, property sales have slowed and they have accumulated plenty of land bank. They are no longer aggressive in land bidding and it's given an opportunity to the other developers."