City set for new auction record

HONG KONG: The auction on Thursday, June 9 of the Borrett Road luxury residential site in Mid-Levels is likely to set a record land price for Hong Kong, according to property analysts.

Surveyors expect the site, at 21, 23 and 25 Borrett Road, will sell for between HK$12 billion and HK$15 billion (RM4.65 billion and RM5.81 billion), or HK$27,500 and HK$34,500 per square foot.

"We estimate the site will fetch HK$12.84 billion or HK$29,502 per sq ft, and break the record of HK$11.82 billion set for the Island Resort site transacted in March 1997," said Patrick Wong, analyst at Samsung Securities. The 1.05-hectare site formerly provided government staff quarters.

The land is one of the few large development sites in the Mid-Levels area still available for sale and flats on middle- to upper-level floors in a future development will command sweeping views over Central.

The accommodation value (land price per square foot in terms of total gross floor area) of the site is not expected to exceed that of 103 Mount Nicholson Road in Mid-Levels East. On July 28 last year, Nan Fung Development teamed up with Wheelock Properties to acquire a luxury residential site on Mount Nicholson Road for HK$10.4 billion or HK$32,014 per sq ft.

Charles Chan Chiu-kwok, managing director at Savills Valuation and Professional Services, expects the Borrett Road site to fetch HK$12 billion or HK$27,500 per sq ft.

"The site has a building height restriction that means a developer will be able to build a residential tower of about 20 floors. Only units above the middle floors will enjoy views over Central and I don't think the flats on the site will offer views of Victoria Harbour," said Chan.

"The view from the Mount Nicholson Road site is better and I don't think the accommodation value of the Borrett Road site will exceed it."

The government has imposed a building height restriction on the site of 210 and 230 metres above the principal datum — the line from which heights are measured. The Hong Kong principal datum is 1.23 metres below mean sea level.

Alnwick Chan Chi-hing, executive director at Knight Frank, said the Borrett Road site could be used to develop houses and luxury residential towers.

"But the house development at Mount Nicholson Road will enjoy more privacy due to the nearby environment. The selling price of units in the Borrett Road site is likely to be less than the Mount Nicholson Road project," he said.

Chan expected the land price of the Borrett Road site to reach HK$13.5 billion, while the selling prices would range from HK$40,000 to HK$50,000 per sq ft.

Samsung cited data from agencies Centaline Property and Midland Realty showing that average asking prices of the nearby 22-year-old Bowen Place and 23-year-old Hong Villa are HK$25,575 and HK$25,567 per sq ft respectively.

Since the land price of the Borrett Road site will exceed HK$10 billion, Savills' Chan said only two or three major developers would be able to join the bidding in their own right, but others may form a consortium.

Samsung's Wong believes a positive land auction result will boost other projects, such as Sun Hung Kai Properties's Imperial Cullinan in Tai Kwok Tsui. The developer plans to launch the 650-flat project in the short term.

The Borrett Road site will be sold at public auction tomorrow together with another residential site in Yuen Long's Ping Shan.

The 65,401 sq ft site located at Ping Kwai Road, near the Tong Fong Tsuen light rail station, could be developed into a low-density residential project with a total gross floor area of 65,401 sq ft and may be used to build a five-storey residential building, as well as houses.

Surveyors estimated it was worth between HK$181 million and HK$300 million, or HK$2,768 and HK$4,587 per sq ft.

Willy Liu Wai-keung, managing director of Ricacorp Properties, said average prices of Imperial Villas and Green Orchid in the area ranged from HK$3,500 to HK$4,000 per sq ft. He said the site could fetch HK$215 million, or HK$3,300 per sq ft. — SCMP