Only one residential plot and another industrial site up for sale this quarter

Themis Qi

The government will put only one residential site in Sha Tin for tender this quarter as the property market recovers slowly.

The current quarter will also have one huge industrial site in Hung Shui Kiu for sale, but zero commercial land due to the high office vacancy rate, Secretary for Development Bernadette Linn Hon-ho said yesterday.

The Sha Tin site, good for 570 units estimated at HK$1.5 billion, is at the junction of Sha Tin Wai Road and Siu Lek Yuen Road with an area of 5,652 square meters.

It is also the second Sha Tin site that the Development Bureau put up for sale this financial year. Last quarter, a nearby site in Yuen Shun Circuit of Siu Lek Yuen was launched but it only covered a smaller area of 2,425 sqm.

The tender of the first Sha Tin site will close next Friday. Linn said she is "cautiously optimistic."

The average unit price of private homes in Siu Lek Yuen ranges from HK$14,742 to HK$17,235 per square foot, which will be a key indicator to estimate the gross development value of the sites, according to CBRE Hong Kong.

For the second site in Sha Tin, Centaline Property Agency lowered the valuation by 16.7 percent to HK$1.52 billion, or HK$5,000 per sq ft, as home prices have retreated in May from the short-lived rally triggered by the removal of housing curbs in late February.

Apart from the second Sha Tin site, the Urban Renewal Authority will launch the Kai Tak Road / Sa Po Road Development project in Kowloon City to offer 810 units and private developers will have three programs to build 410 flats.

These add up to a total of 1,790 units for supply this quarter.

However, there are only 4,065 units for the first half of the financial year ending in March 2025, about 30 percent of the government's full-year supply target of 13,200 flats.

Midland Realty expects the tightened land supply to impact the market and developers will continue to price new homes at market levels with an inventory of over 21,900 units.

In Hung Shui Kiu, the government plans to have buildings on an industrial site of nearly eight hectares mainly to develop modern logistics.

The July-September period also marked the fourth consecutive quarter in which no commercial site was put up for sale.

Linn said it is reasonable as the office vacancy rate stays high at around 13 percent.

The government is estimated to record about HK$190 million of land premiums in the first quarter ending in June, far short of the full-year goal of HK$33 billion.

themis.qi@singtaonewscorp.com