The tender for a residential site at Tuen Mun – the first land sale site to support a minimum size requirement of 26 square meters – has been dropped as the five bids submitted by the main local developers all failed. not reach the government reserve price.
It is the first time in 3.5 years that a government tender for a residential site has been dropped – the last was the tender for a luxury residential site on Mansfield Road at The Peak in October 2018.
Bidders for the site were Henderson Land Development (0012), K. Wah International (0173), Sino Land (0083), Sun Hung Kai Properties (0016) and CK Asset (1113), the Land Department announced yesterday in a communicated.
The government has said it will not speculate on the considerations behind the bids placed by bidders.
Bids are influenced by a myriad of factors, such as how individual bidders assess market conditions and site attractiveness, as well as their corporate positions and development strategies, he added.
James Cheung, executive director of Centaline Surveyors, said he was surprised the offer was dropped, but the impact of the minimum apartment size requirement may not be as significant as many the think.
Cheung believes it is the relatively large scale of the project and the total amount of investment, coupled with recent stock market volatility, that has made developers conservative in their bids.
His comment was echoed by Alvin Lam Tsz-pun, director of Midland Surveyors, who also thinks it’s the mega scale of investment rather than the flat size stipulation that has developers worried.
The property market had just emerged from the shadow of the fifth wave of the Covid outbreak, so developers were understandably cautious in their bids, Lam said.
The land – Tuen Mun Town Lot No 561 – has an area of approximately 33,713 m² and houses with a maximum gross floor area of 121,367 m² are expected to be built there.
Its market valuations range from HK$7.4 billion to HK$8.5 billion, or HK$5,600 to 6,500 per square foot.
Notwithstanding the cancellation of the tender, the government will continue to apply the minimum apartment size requirement to government land sale sites, railway property development projects and urban renewal, as well as lease amendment/land exchange applications for private residential development projects. , said a spokesperson for the Development Office.
This is aimed at improving living space and meeting societal aspirations, the spokesperson said, adding that many bidding exercises mounted by the URA and MTR Corporation for sites with demanding requirements minimum apartment sizes have been successfully concluded.
The policy objective of the authorities is to provide the market with a stable and sustained land supply to meet the housing needs of the community.
This target will not be affected by the results of individual tenders or the economic situation for a while, the spokesperson said, and the tender will be rolled out again at the appropriate time.