Hong Kong’s first private auction of farmland flops, in a setback to plan to bolster housing supply
The asking price of HK$370 million, or HK$3,100 per square foot before adding the conversion premium, was much higher than any comparable price in surrounding areas
Hong Kong’s first private auction of convertible farmland failed to find a buyer, in a setback to the city government’s plan to make more plots available for the construction of residential buildings.
Not a single person out of nine registered bidders showed their hand during 30 minutes of hushed proceedings at the auctioneer’s office in Central on Monday, even though 40 people showed up at the sale, where 10 plots of land in Yuen Long measuring a total of 119,000 square feet were up for grabs.
The land plots were valued at a combined HK$370 million (US$47.2 million), or HK$3,100 per square foot on average, before including the premium needed to convert their usage from agriculture into residential.
Still, the auctioneer put on a brave face, saying he was satisfied that more than 100 inquiries had been received on the sale. “I think the response was good enough,” said Alger Cheng, general manager of CS Property Group, which conducted the auction. “The collection of 10 plots of land is very attractive.”
The cold response was probably due in part to the remoteness of the plots, and the fact that they were not connected with each other, being distributed variously near Yuen Long and Long Ping and the Tin Shui Wai MTR station.
In addition, there was also the lack of infrastructure and amenities near the sites, as well as a complicated ownership structure involving the deed holders, opposition by interest groups and the possibility of compensation that must be paid to existing occupants, analysts said.