Developers seen staying cautious on land acquisitions

Hong Kong developers are likely to remain cautious about buying land, industry watchers say, even though they have been aggressively raising prices for new projects.

A tender for a residential site in Ma Kam Street, Ma On Shan, yesterday attracted 18 bidders, but James Cheung, a director at Centaline Surveyors, said their bids were expected to be low.

"Since the development scale is small, the investment cost and risk are relatively low," he said. "It attracted many bids. With the outlook uncertain, the developers' offers will be conservative and try to test the reserve price."

Cheung has cut his estimate for the site by more than 11 per cent to HK$900 million, or HK$4,500 per square foot.

Surveyors estimate the site is worth between HK$600 million and HK$900 million.

Among those bidding for the 33,272 square foot site were Cheung Kong, K Wah International, Sino Land, Wing Tai Properties, K&K Property, Wing Tai Properties, HKR International, Far East Consortium, Soundwill Holdings and a consortium of Regal Hotels International and Paliburg Holdings.

The site could provide at least 310 flats and yield a maximum gross floor area of 200,210 sq ft.

Meanwhile, developers are becoming more optimistic about the sales prospects of luxury projects after Sun Hung Kai Properties' Seafront development in Tsuen Wan set a New Territories home record in terms of price per square foot this week.

A price list released by Henderson Land on Thursday for the remaining 24 flats at 39 Conduit Road in Mid-Levels West featured what could become Asia's most expensive flat based on price per square foot. The asking price for the 5,732 sq ft penthouse on the 46th floor is HK$646.48 million, or HK$112,784 per square foot. This would eclipse the record set in 2012 by a flat at Swire Properties' Opus Hong Kong which sold for HK$455 million, or HK$86,200 per square foot.

Four houses were sold at the Seafront, at prices ranging from HK$115 million to HK$162 million, or HK$46,528 to HK$55,889 per square foot.

Midland Realty chief executive Sammy Po Siu-ming said top-tier and mass housing had been most active recently. "It's given developers confidence to sell flats at a higher price."