Two Kowloon sites tipped to fetch more than HK$6b

HONG KONG: Two medium-sized residential sites in Kowloon were triggered for auction on Wednesday, June 30, a move that showed developers were eager to replenish their land banks in urban areas.

The Lands Department said a residential site in Hung Hom would be sold for a minimum guaranteed bid of HK$1.77 billion (RM738 million) and another residential site at Argyle Street, Ma Tau Wai, for HK$2.85 billion.

Surveyors estimated the two sites together would contribute more than HK$6 billion to government coffers.

Their optimism about the upcoming land sale rose after Sun Hung Kai Properties paid HK$10.9 billion for a luxury residential site in Ho Man Tin early last month. It was the second-highest price ever for a development site sold by auction.

Pang Shiu-kee, the managing director of SK Pang Surveyors, estimated the Hung Hom site would sell for an accommodation value of HK$7,000 per square foot or HK$2.5 billion.

He predicts a price of more than HK$10,000 per square foot or HK$4 billion for the Ma Tau Wai site.

"Considering the two sites' locations, developers big and small will join the auction," he said.

If a luxury residential site at Mount Nicholson, to be sold by auction on July 28, fetched a high price, the two Kowloon sites could attract higher bids, Pang said.

The auction of the two sites will be held on August 17.

Alvin Lam, a director at Midland Surveyors, said the unexpectedly strong outcome for the Ho Man Tin site showed that developers were willing to pay a higher price for development sites in good locations.

Lam expects keen bidding for the Hung Hom site as flats on the high floors would enjoy sea views.

The site, located in front of the residential project Harbour Place, will provide a total gross floor area of 365,750 sq ft. The height limit of 100 metres allows for residential blocks of 33 storeys.

The reserve price of HK$1.77 billion represents an accommodation value of HK$4,839 psf.

Paul Louie, the regional head of property research at Nomura International, said the government had lowered its asking prices for sites under the application list in order to make it easier to trigger a sale.

"We can see more sites released for auction," he said.

The second site, which will provide a gross floor area of 394,285 sqft, is at 204 Argyle Street, close to Kowloon Hospital. -- South China Morning Post