They have raised their price targets following Tuesday's government land auction that saw a commercial site in Kowloon Bay sell for far more than expected.

New World sales and marketing director Barbara Ho said the company expects to start pre-sale of the uncompleted flats in the middle of next month when the sales consent is granted.

Located at Tseung Kwan O Area 55B, next to the Dream City housing development, the project will feature three residential towers with a total of 1,472 flats. It is due for completion in the middle of next year.

Ho expects the first batch of flats to be priced at about HK$4,000 per square foot, compared with prevailing prices of HK$3,500 to HK$3,800 psf in the Tsueng Kwan O secondary market.

``The higher-than-expected transaction price of a Kowloon Bay site at Tuesday's government land auction will further help boost market sentiment, so we have raised the expected price tag of The Grandiose by more than 5 percent to HK$4,000 psf from HK$3,800 psf,'' she said.

Flats in the Tseung Kwan O project range in size from 580 square feet to 1,020 sq ft.

The project includes a shopping arcade of 170,000 to 180,000 sqft.

New World is already selling flats in The Merton, a joint-venture residential project with the Urban Renewal Authority in Kennedy Town, Western District.

Managing director Henry Cheng said this week that New World could count on HK$4 billion from sales of The Merton, which will not be completed for eight months.

New World is expected to use the revenue from the two residential projects to pay down debt.

New World shares rose 1.96 percent to close at HK$7.8 on Thursday.

Meanwhile, Chun Wo Holdings said it would launch the remaining 90 apartments of the Choi Hung tower, 8 Clear Water Bay Road, with the selling price likely to increase by 5 percent. Property development general manager Clement Ying said homes in the development are currently on offer at HK$6,500 to HK$8,000 psf. raymond.wang@singtaonewscorp.com