Chinachem wins site in Sha Tin for $1b

Staff reporter

Chinachem won a government residential site in Sha Tin for HK$1.02 billion or HK$3,357 per buildable square foot, slightly lower than the market forecast, while the tender of a redeveloped site in Kowloon City has been withdrawn.

As the first land bid after the policy address, the Sha Tin site was finally sold at 4 percent lower than estimates but 15.1 percent cheaper than a smaller site nearby claimed by Sun Hung Kai Properties (0016) in July.

At the junction of Sha Tin Wai Road and Siu Lek Yuen Road, the project comprises a total buildable area of approximately 304,100 square feet, expected to provide around 570 units.

Chinachem beat five rivals including CK Asset (1113), SHKP, Sino Land (0083), Wheelock Properties and an unknown consortium in the bid.

It plans to build small and medium-sized units on the plot. The developer expects to benefit from the neighborhood's well-established infrastructure.

Centaline Property Agency said the developers are conservative about the bid, citing the high inventory of new homes and the lower competitiveness of the Sha Tin site, which is farther from MTR stations than the previously sold plot.

It even came amid the property market's expected gains in momentum from further eased mortgage rules announced by the government earlier this month, the beginning of the global rate cut cycle and the reinvigorated stock market.

Meanwhile, the Urban Renewal Authority withdrew the Kai Tak Road/Sa Po Road redevelopment project in Kowloon City after receiving only one bid from CK Asset.

The URA said the additional terms proposed by CK Asset "deviate" from the project's tender terms, but the authority will not disclose the related proposal and assessment according to the established tender procedures and guidelines.

CK Asset responded saying its bid was intended to prevent the tender's failure while without hurting the URA's financial gains.

The project is expected to cover around 810 residential units with a total buildable floor area of 514,121 sq ft.

Knight Frank Greater China senior director Martin Wong Shiu-kei attributed the withdrawal to the huge housing supply at Kai Tak, saying the developers won't be interested in the project unless the price is very attractive.

Knight Frank suggested that the URA revise some terms about gains and the responsibility of the developer, or relaunch the project when the sentiment further improves.