Seven bids are received for residential site in Kowloon Tong that's expected to fetch HK$9.5b
SANDY LIsandy.li@scmp.com
PUBLISHED : Saturday, 19 September, 2015, 3:39am
UPDATED : Saturday, 19 September, 2015, 3:39am
Green Sense's Roy Tam (right) expresses an opposite view on developing Yin Ping Road. Photo: SCMP
Hours after the US Federal Reserve decided not to raise its target interest rate from near zero, the Hong Kong government saw an encouraging response to the tender of a luxury residential site in Kowloon Tong that could require a total investment of more than HK$10 billion.
The Lands Department yesterday said it had received seven bids for the Yin Ping Road plot, which will yield a total gross floor area of 632,835 sq ft.
"The response is within my expectation of five to eight bids as the project will involve a huge capital investment," said Victor Lai Kin-fai, the chief executive of consultancy Centaline Professionals. He estimated the site could be worth HK$9.5 billion, or HK$15,000 per square foot. Taking construction costs into consideration, the total development cost could increase to HK$20,000 per sq ft, or HK$12.5 billion.
Vincent Cheung Kiu-cho, the head of valuation advisory services for greater China at property consultant DTZ/Cushman & Wakefield, said the Fed decision was "positive news for the market but an increase will come by the end of the year end or early next year anyway".
"Developers will take a more long-term view as a property project needs three or four years to complete," he said.
The Kowloon Tong site attracted bids from major developers including Henderson Land Development, Cheung Kong Property (Holdings) and Wheelock Properties.
Cheung said various government sites had sold for good prices in the past couple of months.
Kowloon Development launch The Upper East project sale in Mongkok. Photo: K.Y. ChengDevelopers have been offering aggressive incentives to drum up sales, with the latest, by Kowloon Development for its Upper East development in Hung Hom, offering 30-year loans without the need for proof of income.
The plan encouraged buyers to stay until midnight on Thursday, snapping up 219 flats or 90 per cent of the second batch of 242 units released for sale just four hours earlier.
However, Hong Kong Monetary Authority chief executive Norman Chan yesterday said the Fed's decision not to increase interest rates this week did not mean the low interest rate environment would stay for long and he warned a rate rise might hit the local property market hard.
Peter Tse, a sales manager at Centaline Property Agency's Tin Shui Wai branch, said some owners had lowered their asking prices before the Fed meeting.
One owner had reduced the asking price for his 551 sq ft flat at Kingswood Villas in Tin Shui Wai twice, from HK$4.1 million to HK$4.05 million and then to HK$3.85 million.
"We did not receive any instruction from him to revise the asking price upwards today," Tse said. "It will be the lowest transaction price for such a size if the unit is sold."
Gary Wong, an assistant associate director at Midland Realty's West Mid-Levels branch, said about 15 per cent to 20 per cent of owners were willing to offer 5 per cent discounts.
"The volatility of the stock market has dampened the investment mood," he said, "Sales volume has dropped by 50 per cent from the same period last month."
http://m.scmp.com/news/hong-kong/economy/article/1859619/encouraging-response-tender-luxury-hong-kong-residential-site
