Is Hong Kong’s housing market recovering? Plot of land in Tai Po attracts more bids than expected

A parcel of residential land for sale in Tai Po fetched more bids than anticipated in a possible sign that Hong Kong’s developers are becoming more optimistic about the flagging market.

The plot at Pak Shek Kok had received 10 bids when the tender closed at noon on Friday, beating Knight Frank’s estimate of five to eight bids.

The builders that submitted bids included Sun Hung Kai Properties, CK Asset Holdings, Henderson Land Development, Wheelock Properties, K Wah International, K&K Property, Far East Consortium, KWG Property and a joint venture between China Overseas Land and Investment and Sino Land. The other bid was from a consortium comprising Asia Standard International Group, Lai Sun Development, Lifestyle International Holdings and CSI Properties.

The plot, the last one to go for tender in Pak Shek Kok, is valued between HK$5.2 billion (US$663 million) and HK$6.2 billion, or HK$5,500 to HK$6,500 per square foot, according to Knight Frank. At a plot ratio of 2.68 times, the 354,136 square foot site can be developed to provide a total gross floor area of almost a million square feet, the size of about 12 football fields.

The tender comes after a hotel site in the Kai Tak area was withdrawn from tender last week because the prices offered by the nine bidders did not meet the Lands Department’s reserve price.

Housing is seen as less risky than commercial development because of an overall shortage of residential supply and the longer time generally required for a commercial development to become popular, said Tony Wan Wai-ming, general manager of sales and marketing at K Wah.