HONG KONG, Sept. 30, 2011 /PRNewswire-Asia/ -- Vincent Cheung Kiu-cho, Cushman & Wakefield's national director for valuation and advisory services said, "The government land sites for sale by tender are located in Sai Kung, on South Bay Road and in Shek Mun, Sha Tin. Considering the discrepancies between the lands and their uses, with a worsening global economy, transaction prices are expected to be disappointing. The first site in Sai Kung Town, Area 4, designated for hotel purposes, is triggered for tender at HK$580 million, or HK$2,002 per buildable sq. ft." The land is the first hotel site in the district triggered for sale under the Application List System. The tender started from September 23 and closes on October 21.
Cheung further points out that the lot has a site area of about 193,100 sq. ft., while its total GFA is 289,700 sq. ft., with a plot ratio of about 1.5. The Sai Kung land is designated for hotel development. Cheung estimates that the land lot will be sold at HK$800 million, or HK$2,762 per buildable sq. ft. Despite the fact that Sai Kung is a popular choice for local holiday-makers, the investment and operation costs involved in hotel development are considerable, and transport network in the district is not as developed as in the city center. Ancillary facilities of hotels and resorts in Sai Kung are not enough. With only 3-storey buildings allowed, resorts are expected to be constructed. But considering the lack of ancillary facilities, Cheung estimates that developers are not eager for the site.
Another site for tender is near 35 South Bay Road on Hong Kong Island. It enjoys a sea view in Repulse Bay. The tender started on September 23 and closes on October 28. At this stage, Cheung expects that the land will fetch HK$460 million, or HK$35,295 per sq. ft. Having a site area of 14,400 sq. ft. with a plot ratio of 0.9, the land is designated for private residential development. The maximum and minimum site areas are about 7,782 and 13,000 sq. ft. It is expected that a number of detached houses will be built.
The last lot is located in Shek Mun, Sha Tin, and is designated for business use, triggered for sale at HK$775 million, or HK$1,800 per buildable sq. ft. The land is tendered for sale from September 30 to October 28. Cheung said that the land is at the junction of On Yiu Street and On Kwan Street, Shek Mun, Sha Tin (STTL 463). It has a site area of 86,100 sq. ft., with a GFA of about 430,000 sq. ft. and plot ratio of 5. Cheung expects that the business land will be sold at HK$830 million, or about HK$1,928 per buildable sq. ft.
Cheung opined that despite developers' keen interest in decentralized business districts, and the site's proximity to MTR Shek Mun Station, the site comes with insufficient ancillary facilities. The potential to develop the district into a commercial hub is undermined by old industrial and commercial buildings near the land lot. If it is to be developed into high-end commercial buildings, nearby ancillary facilities are incapable of supporting the development. However, if low-end commercial buildings are to be developed in the site, they can hardly compete with old industrial buildings. Therefore he expects that developers will be cautious when submitting their tenders.
Sale of land by tender and Cushman & Wakefield estimation:
| Lot 1950 in DD 221 Sai Kung Town, Area 4 |
RBL 1168 Near 35 South Bay Road, Hong Kong |
STTL 463 Junction of On Yiu Street and On Kwan Street, Shek Mun, Sha Tin |
|
| User | Hotel | Residential R3 | Business |
| Site Area (sq. ft.) | Approx. 193,100 | Approx. 14,400 | Approx. 86,100 |
| Total GFA (sq. ft.) | Approx. 289,700 | Approx. 13,000 | Approx. 430,000 |
| Plot Ratio | Approx. 1.5 | Approx. 0.9 | Approx. 5 |
| C&W Estimation (Land Value) | HK$800 Million | HK$460 Million | HK$830 Million |
| C&W Estimation (A.V.) | Approx. HK$2,762 | Approx. HK$35,295 | Approx. HK$1,928 |
| C&W Estimated Unit Sales Price | N/A | Approx. HK$48,000 to HK$55,000/sq. ft. | Approx. HK$4,000 to HK$5,000/sq. ft. |
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Cushman & Wakefield is the world's largest privately-held commercial real estate services firm. Founded in 1917, it has 234 offices in 61 countries and more than 13,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies. It offers a complete range of services within five primary disciplines: Transaction Services, including tenant and landlord representation in office, industrial and retail real estate; Capital Markets, including property sales, investment management, investment banking, debt and equity financing; Client Solutions, including integrated real estate strategies for large corporations and property owners, Consulting Services, including business and real estate consulting; and Valuation & Advisory, including appraisals, highest and best use analysis, dispute resolution and litigation support, along with specialized expertise in various industry sectors. A recognized leader in global real estate research, the firm publishes a broad array of proprietary reports available on its online Knowledge Center at: www.cushmanwakefield.com.
