The tender for a Yau Tong site has been awarded on a 50-year land grant at a premium of $4.005 billion, the Lands Department announced yesterday.
A residential site in Yau Tong was awarded to Chinese state-owned enterprise Minmetals Land Limited (0230) for HK$4 billion – or HK$7,068 per square foot – beating market expectations by more than 40 percent.
The site occupies an area of around 113,345 sq ft and the maximum gross floor area is around 566,725 sq ft.
It has a site area of 10,530 sq m and is designated for non-industrial purposes, excluding godowns, hotels, offices and petrol filling stations. The minimum and maximum gross floor areas are 31,590 sq m and 52,650 sq m, including a public vehicle park to be constructed by the purchaser.
The market expectation for the site was HK$2.55 billion to HK$2.83 billion, or HK$4,500 to HK$5,000 per sq ft.
Thomas Lam Ho-man, senior director at Knight Frank, said the price far exceeded expectations.
It showed that some mainland companies are still actively seeking to acquire quality sites in Hong Kong and that they are confident about the future of the home market, Lam said.
A residential site in the nearby area of Lei Yue Mun Path was awarded to Kowloon Development Company (0034) for HK$1.58 billion, or around HK$5,040 per sq ft, in 2014.
The Lands Department had received a total of 13 tenders for the site, including those from major local developers such as Cheung Kong Property (1113), Sun Hung Kai Properties (0016) and Wheelock (0020) among others.
Sino Land (0083) partnered with K Wah International (0173) and Lai Sun Development (0488) to bid for the site, while New World Development (0017) partnered with Vanke Property.
The is the first time Minmetals Land has submitted tenders for residential sites in Hong Kong.
Minmetals Land said it plans to develop the site into a mid-to-high-end residential project with four main blocks, providing 792 flats.
The developer estimates it will invest around HK$7 billion on the project.
Minmetals Land deputy chairman He Jianbo said compared to the mainland market, the ratio of Hong Kong’s land to home prices is still at a relatively reasonable level.
He is confident about the prospects of Hong Kong’s home market as he believes in the long term the situation of insufficient supply to meet demand in the local home market will continue.
The site in Yau Tong is at the junction of Shung Shun Street and Yan Yue Wai and the developer will have to provide 122 public parking spaces in the project.
Lam says flats in the project will have to be sold for at least HK$15,000 per salable sq ft for the developer to make a profit.
Following the sale, it was reported that an owner in Laguna City suspended the sale of his 748 ssf flat. The asking price for the unit was HK$7.75 million.
Yau Tong site sold