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Keen competition expected at land auction
1. Keen competition expected at land auction Four
sites are expected to attract keen interest from developers and reap at least
$3.42 billion when they go under the hammer today at the second land auction this
year. Analysts said the sale might even spark a small recovery in recently sluggish
property stocks. Midland Surveyors director Ronald Cheung said one of the prime
sites - in West Kowloon - could fetch $1.27 billion, or about $1,500 per square
foot. Big developers such as Henderson Land would show keen interest in the site
which could accommodate 1,100 flats of 600 square feet each, he said. Dao Heng
Securities analyst Eric Yuen believed Henderson Land and Sino Land were likely
to compete for the site, which would push the sale price towards the high end
of market expectations, which range from $1.1 billion to $1.5 billion. He expected
the site to sell for $1.5 billion, translating into an all-in-cost of $3,300 per
square foot. But Cheung said bidding might be prudent because the supply of flats
was plentiful until 2004. The West Kowloon site, situated near the Mass Transit
Railway (MTR) Olympic station, would offer a better sea view than the nearby Island
Harbourview, which currently trades at $4,000 per square foot in the secondary
market. The second prime site - in Kowloon Tong - is expected to sell for between
$500 million and $600 million because of its proximity to the MTR and Kowloon-Canton
Railway interchange. But Cheung warned that whoever won the bid would have to
face higher construction costs as the site was on a slope. Both prime sites were
taken off the application list after developers offered minimum guaranteed bids.
Henderson Land chairman Lee Shau-kee said on March 26 his company had triggered
the sale of the West Kowloon site, while an unknown developer with a minimum guaranteed
bid of $460 million, or $1,527 per square foot, sparked the sale of the Kowloon
Tong site. The third site - at No 2 Lok Kwai Path of Area 43, Sha Tin - is expected
to sell for $570 million, or $1,370 per square foot. The developer would have
to demolish the existing buildings being used as Hong Kong Polytechnic University
staff quarters. Analysts expected the fourth site - on Cape Road, Chung Hom Kok
- to fetch up to $90 million. [Source:
Hong Kong iMail, 15 April 2002] |  |
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