Hong Kong land tender gets just one bid, likely to be withdrawn as high interest rates, Lantau location deter builders
- Tepid response to plot on Lantau Island, with only Sino Land submitting a bid, continues a dismal year for government land sales in the city
- As of November, land sales made only 14.2 per cent of the fiscal-year target of HK$85 billion (US$10.9 billion), with six sites withdrawn, JLL says
The tender for the only residential plot of land available in Hong Kong in the current quarter has received an icy response of just one bid and is expected to be withdrawn, as high interest rates and undigested supply in the neighbouring area deter developers.
Sino Land was the sole bidder for the parcel on Lantau Island as of Friday, the last day of the tender, according to the Lands Department.
The site is a 1.9-hectare parcel in Cheung Sha, which is expected to yield 110 housing units, accommodating low-rise and low-density town houses, according to surveyors. The land was valued at about HK$245 million (US$31 million) based on a gross floor area of 81,666 sq ft, which translates to HK$3,000 per square foot, according to Midland Surveyors.
The lukewarm response continues a dismal year for government land sales in the city. As of November, sales have only achieved 14.2 per cent of the current financial year’s land premium revenue target of HK$85 billion, and six sites have been withdrawn after receiving no bids or insufficient bids, according to JLL.
James Cheung, executive director at Centaline Surveyors, said the firm will further lower its valuation of the site from an initial estimate of about HK$490 million to HK$327 million, which translates to HK$4,000 per square foot. The company expects that the tender will be withdrawn.
The lack of developer interest came as no surprise, according to Alex Leung, senior director at CHFT Advisory and Appraisal, who cited high interest rates and lack of demand for holiday houses.
