Mega New Territories housing project to begin after HK$6.53b land deal

Development of a mega-sized private residential project comprising about 6,000 units in Tuen Mun, believed to be the largest in New Territories, will soon get off the ground after a HK$6.53 billion (US$836.4 million) land premium settlement was reached between Sun Hung Kai Properties and the government.

The land transaction was concluded on May 17 for the commercial-residential site at Area 54 in Tuen Mun, which could yield a total gross floor area of 2.3 million square feet, according to data released by the Lands Department on Friday. The site, close to West Rail Siu Hong station, has an area of 461,000 sq ft.

The deal, the largest land premium paid since 2011, represents HK$2,800 per sq ft.

In 2011, New World Development paid HK$6.64 billion for a site, which could yield 1.08 million sq ft, in Sai Kung, now developed into Mount Pavilia development. The land premium paid then was HK$6,148 per sq ft.

Victor Lui Ting, deputy managing director at SHKP said the land premium amount was reasonable .

“The site is close to West Rail station, and will be developed into small- to medium-sized units,” he said.

Based on unit sizes of 400 to 500 sq ft, the site could accommodate about 4,600 to 5,700 units, said industry experts.

Tuen Mun’s ‘nano flats’, smaller than standard car parking lots, command outsize rents

“It could be the largest project in the New Territories,” said Vincent Cheung Kiu-cho, deputy managing director of Asia valuation and advisory service at Colliers International.

Together with construction cost of about HK$4,500 per sq ft, he said the investment would be huge.

Taking into account the land cost, the total cost would be HK$7,300 per sq ft, or nearly HK$17 billion.

Cheung said new flats in the area went for HK$13,000 to HK$15,000 per sq ft.

SHKP is a large land holder in Tuen Mun and Yuen Long.

Major projects on sale now include Eight Regency, which it launched at an average discounted price of HK$12,748 per sq ft, setting a new benchmark in the area.