Housing site bid a nonstarter

A residential site for the starter home project in Tsuen Wan might be taken up by the Hong Kong Housing Society after the tender was withdrawn amid a sluggish market.

The only bid from Grand Ming Group was rejected as the tendered premium failed to meet the reserve price for the site at Tsuen Wan Town Lot No 430 in Yau Kom Tau, the Lands Department said.

The plot with an area of around 48,673 square meters can accommodate at least 1,940 starter homes with a maximum gross floor area of 97,200 sq m. Market valuation for the site ranges from HK$1.88 billion to HK$3.56 billion, or from HK$1,800 to HK$3,400 per square foot.

To protect public revenue, the government will not sell a site if no bid reaches the reserve price, the department said. "Bids are influenced by factors such as how tenderers assess market conditions and the attractiveness of the site, as well as their corporate positions and development strategies," it said.

Despite the cancellation of the tender, authorities still considered the site suitable for developing starter homes and will invite the HKHS to take over, the Housing Bureau said.

The HKHS said it would do its best to assist the government in increasing the supply so as to provide the public with affordable housing choices.

Grand Ming said that its bidding price was relatively conservative, given the various restrictions listed in the tender terms.

Homes to be built on the site bear a minimum saleable area of around 280 sq ft and more than 70 percent of them should be no smaller than 375 sq ft.

The developer is required to sell the flats at 80 percent of market prices and construct a 50-place day activity center cum 50-place hostel for severely mentally handicapped persons.

Developer CK Asset said that the site is of high financial risk so it decided not to participate in the bidding.

This came as Financial Secretary Paul Chan Mo-po reiterated the government's determination to ensure adequate land supply in the city will not be shaken by short-term market fluctuations.

Chan said the government must not repeat the painful experience of the past when land supply was insufficient.

He said the government has confidence that the Northern Metropolis and Kau Yi Chau Artificial Islands can be developed simultaneously and land sale proceeds generated from the latter far outweigh the cost of reclamation.

Still, Kenneth Hui Wai-chi, the executive director (external) of the Hong Kong Monetary Authority, urged authorities to plan early when it comes to financing options for the two projects amid market uncertainties.

Reacting to views that the Kau Yi Chau plan should be put on hold at least until the economy fully recovers, Secretary for Development Bernadette Linn Hon-ho asked whether the government would be given enough time for land formation if it calls off the project.