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1. Sun Hung Kai wins Tuen Mun rail site tender

1. Sun Hung Kai wins Tuen Mun rail site tender
FOSTER WONG , SCMP 4 August 2006

Sun Hung Kai Properties (SHKP), Hong Kong 's biggest property developer by market value, yesterday beat three rivals to win the right to develop a residential project at the Kowloon-Canton Railway Corp's (KCRC) Tuen Mun station that surveyors estimated could be worth HK$8 billion.

The developer outbid Cheung Kong (Holdings), Henderson Land Development and mid-tier developer K Wah International for the West Rail joint venture, which will feature 1,924 residential units when completed in 2013.

The award came after the Lands Department slashed the premium it was seeking by 28 per cent to HK$3.88 billion, or HK$2,496 per square foot. The original land premium demand led KCRC to postpone the sale after it received only one bid in December last year.

Analysts said that with the lower premium, SHKP was likely to make a healthy profit on the project, which includes a large amount of retail space.

"It is an appealing residential project, given the fact fresh supply has been relatively short in Tuen Mun in recent years," said James Cheung King-tat, a senior associate director of Centaline Surveyors.

Mr Cheung expects SHKP to price flats at more than HK$3,000 per square foot, against HK$2,000 to HK$3,000 per square foot in the resale market.

Neither KCRC nor SHKP disclosed how they will split profits from the project. The city-owned railway's share will go straight into government coffers.

The 2.65 hectare project will include seven 32- to 39-storey residential towers on podiums that will accommodate shops and community facilities. The development's residential units will average 668 square foot each with a gross floor area of 1.55 million sqft.

Shares in SHKP fell 0.18 per cent to HK$83.40 yesterday.