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1.Two
West Kowloon sites set for auction
1. Two West Kowloon sites set for auction
CHLOE LAI, FOSTER WONG and SANDY LI,
SCMP 19 August 2005
Two
adjacent residential sites in West Kowloon worth more than $3.75
billion will be auctioned next month.
The
sale on September 27 already represents a number of milestones -
the first residential land auction since last October, the first
land auction this financial year and the first land sale since the
application list system was modified on June 21.
Market
observers say it will provide a timely reference for the land value
of the 40-hectare West Kowloon Cultural District site as the government
prepares to announce plans next month for how to get the controversial
project moving.
The
Lands Department said the sale of the sites near the Olympic MTR
station had been triggered by the same property developer. They
are Lot 11167 at the junction of Hoi Wang Road and Hoi Ting Road
and Lot 11168 on Hoi Ting Road.
Industry
players are optimistic the sale prices of the two will be 30 per
cent higher than the developer's proposed prices and provide a stimulus
to the property market.
Midland
Surveyors associate director Alvin Lam Tsz-pun estimated the government
could reap as much as $2.51 billion, or $4,200 per sq ft, for the
site at Hoi Ting Road. The proposed price is $2.09 billion.
He
estimated the smaller lot at the junction of Hoi Wang Road and Hoi
Ting Road at $2.15 billion, or $4,300 per sq ft. The proposed price
for this piece of land is $1.66 billion.
The
two sites will provide up to 1,500 residential flats to be completed
in 2007, likely to sell at $7,000 to $7,300 per sq ft, surveyors
said. This compares with current prices in the area of $4,000 to
$6,000 per sq ft.
"Response
for the land auction is going to be overwhelming, given that it
has been 10 months since the last residential site was launched
in the market," Mr Lam said. "The two sites can be built
into a single mass housing estate if they can be successfully bought
by one developer."
Centaline
Property Agency chairman Shih Wing-ching said the auction results
would serve as a reference for the value of the West Kowloon Cultural
District.
"The
cultural hub, of course, will be more expensive," he said.
The
proposed prices will be the opening bids of the September auction.
The Lands Department declined to comment on whether the proposed
prices had reached the government's asking prices or just 80 per
cent of them, which is permitted under the modified application
system.
Under
the changes, a developer that triggers an auction must join the
bidding but is not obligated to buy the site if its offer fails
to satisfy the government.
Lands
officials will estimate the prices hours before the auction and
not sell the land until the bidding prices reach or pass the estimates.
Sino
Land and Henderson Land, which have residential projects in the
neighbourhood, denied they were the auction applicants.
Sun
Hung Kai, which is also developing a residential project in the
area, and Cheung Kong (Holdings) declined to comment.
The
government collected more than $20 billion from the sale of six
sites last financial year - far more than its forecast of $4.56
billion and enough to help tip the budget deficit into surplus.
In the March budget, it expected $31.9 billion from land premiums
this fiscal year.
Vigers
Appraisal and Consulting executive director Tony Chan Tung-ngok
said the auction proved the modified land application list system
was working
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