Land prices in the New Territories are expected to fall further after a large residential site in Tai Po sold for HK$3,620 per square foot, about 20 per cent lower than the adjacent one sold in September last year. The Lands Department on Tuesday said the tender for the site at Chong San Road, Pak Shek Kok was awarded to Billion Real Estate Holdings with its highest bid of HK$4.02 billion. The price means land values have dropped 20.73 per cent in eight months after the Lands Department sold another residential site in Pak Shek Kok to K Wah International for HK$4,567 per square foot in September. “It will definitely add downward pressure on upcoming land sales in the New Territories and provide large supply in the area,” Victor Lai Kin-fai, the chief executive of consultancy Centaline Professionals, said. In 2009, another Pak Shek Kok site sold for a record HK$7,284 per square foot. Yesterday’s sale was also five to 10 per cent below market expectations. Surveyors had already lowered their estimate to HK$4.2 billion to HK$4.45 billion, or HK$3,800 to HK$4,000 per square foot because the view from any buildings will be blocked by future developments. Alvin Lam, a director at Midland Surveyors, said the low prices for the latest site reflect developers’ cautious view about the market outlook. Billion Real Estate beat out 12 bidders including major players such as Sun Hung Kai Properies, Cheung Kong Property, Henderson Land Development, Wheelock Properties, a consortium comprised of Sino Land and Vanke Property (Overseas) when the tender closed on Friday. “The winning developer Billion Real Estate bid more aggressively than its rivals as it had bought another site in front of this one in 2014. After combing the two sites, the firm will own a total gross floor area of 1.8 million square feet in the area,” Lam said. In November, 2014, Billion Real Estate paid HK$2.54 billion, or HK$3,552 per square feet for a site with a total gross floor area of 716,000 square feet. With the construction cost of HK$4,000 to HK$5,000 per square foot, Lai expects the winning developer would have to offer the project to be built on the site for HK$11,000 to HK$12,000 per square foot. At present, units at Mayfair by the Sea, a development next to the Chong San Road site, sold for HK$13,500 to HK$22,400 per square feet since it was launched late last year. Lai, however, said most units the Mayfair by the Sea, were built on a waterfront site and could command a view of Tolo Harbour. In February, China Overseas Land & Investment (Coli) bought the site for HK$2.13 billion, or HK$1,848 per square foot. He said the low price for the Lai Chi Shan site was mainly due to the fact that the plot faced a potential judicial review that could stall its sale. Separately, Wheelock Properties will release another 108 units at Savannah today after registering about 2,000 prospective buyers.