Wheelock sends upbeat signal on urban land values, paying HK$6.4b at auction for a site near Lam Tin MTR

Wheelock Properties has won the first residential site offered for sale by the government since the introduction of a new stamp duty, paying a higher-than-expected HK$6.388 billion.

The wholly-owned property unit of Hong Kong-listed Wheelock & Co on Wednesday said they won the tender for the site on Sin Fat Road close to the Lam Tin MTR Station, reflecting its confidence in the city’s housing market.

The developer has plans for a residential development mainly comprising two-bedroom to three-bedroom units, providing a total area of 826,546 square feet.

Alvin Lam, a director at Midland Surveyors, said the higher-than-expected result and the positive bidding response showed that developers retained their confidence in the residential market, especially in dense urban areas.

Wheelock won the site after beating 11 bids from developers that included Cheung Kong Property Holdings, Henderson Land Development, Sun Hung Kai Properties. Mainland developers such as China Overseas Land & Investment and KWG Property were also among the bidders

Surveyors estimated the value of the 196,561 square foot site at between HK$4.55 billion to HK$6.2 billion, or HK$5,500 and HK$7,500 per square foot.

Wheelock said they paid HK$7,729 per sq ft for the plot of land.

Thomas Lam, head of Valuation and Consultancy at Knight Frank, said together with the construction and interest expenses, the total investment cost could be HK$9.5 billion. Completed units will be sold at more than HK$18,000 per sq ft.

The land sale is seen as a test of the market’s sentiment as it is the first government site offered for sale since the introduction of the new stamp duty, which became effective on November 5.

Chief Executive Leung Chun-ying on November 4 announced a standardised stamp duty of 15 per cent for individual and corporate buyers on residential property transaction in a move to cool down the sizzling housing market. Buyers who do not own any residential property at the time of acquisition are exempted.