The site at 3 and 5 Ede Road in the expensive, low density residential district, which is meant for development of luxury housing, was knocked down to the Chinachem Group for HK$1.63 billion (RM647.16 million), or HK$17,976 per square foot — the top end of market expectations and a new record for residential sites in Kowloon in terms of floor area.
The previous record for Kowloon was set at the end of August, when Kerry Properties paid HK$16,587 per sq ft for a site at 1 Ede Road. Kerry was expected to be a keen bidder at yesterday's auction, in the hope of bringing the two sites together.
However, the company faced strong competition from Chinachem. Others joined the fray, including Tai Cheung Holdings, Sino Land and one anonymous bidder, all of whom withdrew, leaving Chinachem to fight it out with Kerry.
Chinachem finally won with the 74th bid, 55 per cent higher than its opening bid of HK$1.053 billion.
The enthusiasm will have delighted the government, which was selling, and also local property owners, who can expect values to rise.
But it angered a League of Social Democrats protest group at the auction led by legislator "Long Hair" Leung Kwok-hung.
The protesters interrupted the bidding twice, accusing developers of speculating and putting homes beyond the reach of ordinary buyers.
The purchase was a first for Chinachem since its then chairwoman Nina Wang Kung Yu-sum died in April 2007. It was willing to pay a premium of HK$1,389 per sq ft over the price paid by Kerry for the neighbouring site, even though yesterday's site does not have as good a view.
"It is a very good site and has great potential," said Ng Shung-mo, sales manager at Chinachem. The price per sq ft was about HK$1,000 higher than he had expected. "There is a great demand for luxury residential projects. It is worth paying a higher price for the site," he said.
The company would have a flexible layout for the project to avoid blocking views from Kerry's site.
Chinachem plans to invest HK$2 billion to build one or two towers comprising 48 flats in total. He expects it can generate reasonable profit if they sell for HK$22,000 per sq ft.
The 30,225 sq ft site, near One Beacon Hill, can provide a total gross floor area of 90,676 sq ft.
Cheung Kong executive director Grace Woo Chia-ching was not concerned by rumours that the government may announce new measures to cool the sector.
Surveyor Nicholas Brooke said the price was at the top end of market expectations, but bidding was still not as aggressive as expected.
Brooke believed any new measures would target the bottom end of the property market and would increase land supply.
"The top-end property market is driven by liquidity and low interest rates," he said. "There is not much they [the government] can do for the top-end property market."
He expected the measures would stabilise the bottom-end and mass residential market but that property prices would eventually resume their rise.
Kerry Properties is part of the Kerry Group, controlling shareholder of the SCMP Group, which publishes the South China Morning Post. — South China Morning Post
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