29 sites set for market despite correction

Top News | Imogene Wong 26 Feb 2016

Seven residential sites from Kai Tak that will provide up to 6,000 units will be put up for sale in the coming fiscal year, making up nearly a third of the government land sales program.

A total of 29 parcels will be available in the 2016-17 fiscal year, starting from April.

The sites are valued at a total HK$67 billion and may provide up to 19,200 homes, a five-year high, Secretary for Development Paul Chan Mo-po said yesterday.

Despite the recent drop in home prices and government failure to tender two sites, Chan said he felt "confident" meeting the home supply target of 18,000 a year as set earlier by Chief Executive Leung Chun-ying.

"The selling price will depend on market conditions, we don't have a high land-price policy," he stressed. Some analysts worried that a surge in supply in the Kai Tak area would suppress home prices in the district. But Stewart Leung Chi-kin, chairman of the Real Estate Developers Association of Hong Kong and also chairman of Wheelock Properties, said supply in the coming fiscal year could be well absorbed by the market.

The majority of the plots on the list yesterday were large, providing more than 500 flats each. Only two sites are on Hong Kong Island, with 10 in Kowloon and the remaining 17 in the New Territories. MTR Corp Limited's (0066) railway property projects, including LOHAS Park, Ho Man Tin station, Wong Chuk Hang station, and West Rail's Kam Sheung Road station, are expected to yield another 4,840 apartments. Five redevelopment projects of the Urban Renewal Authority are likely to generate 480 flats.

Only two sites one in Kennedy Town and another in Ap Lei Chau need rezoning, compared to 15 in the current fiscal year. Chan noted the government plans to rezone 45 plots to be put on sale in future.

The bigger plots in next year's list include a former mine in Cha Kwo Ling, Kowloon, valued at HK$5.5 billion, and also a site in Chong San Road, Pak Shek Kok in Tai Po, expected to fetch at least HK$4.5 billion. The seven residential sites from Kai Tak, with a combined site area of about 780,000 square feet may yield 6.25 million square feet of gross floor area and are valued at more than HK$30 billion.

JLL Hong Kong head of research Denis Ma said an influx of new supply does not necessarily mean home prices will drop, taking Tseung Kwan O as an example where prices have kept rising despite a wave of new supply.

All of the three hotel sites for sale in the same year also come from an area near the Kai Tak Cruise Terminal. They will provide 2,100 rooms.

Seven plots are up for sale between April and June, including three in Tai Po along with one each in Tuen Mun, Sha Tin, Tsing Yi and Yau Tong.

As for the eight commercial sites, the most notable one is the Murray Road Car Park in Central, which is the first Central commercial site offered by the government since 1995. Vincent Cheung Kiu- cho, valuation and advisory services chief of Colliers International, said the plot may attract mainland firms that want to build new headquarters.

Another two commercial plots are in Kai Tak, three in Cheung Sha Wan, one each in Wong Chuk Hang and Kwai Chung.

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