Land premium lower at LOHAS Park site
Finance | Esther Yu 5 Feb 2016Land premium for phase 10 of LOHAS Park is 20 percent lower than that for Phase 9, and set at about HK$2,044 per square foot.
Tenders for the project began yesterday and expires on March 7. The land premium for the site has been fixed at HK$1.659 billion, about 7 percent lower than surveyors' estimates. Profit-sharing ratio with MTR Corp Ltd (0066) is fixed at 20 percent.
Phase 9, which is similar in scale to Phase 10, was put out for tender last November and won by Wheelock (0020), who will pay a land premium of HK$2.852 billion, or HK$2,545 psf.
This is 20 percent higher than what the government is seeking for Phase 10.
Phase 8 was won by CK Property (1113) at a premium of HK$2,830 psf.
In fact, phase 4 of LOHAS Park, put out in March 2014, stood at a similar land premium of HK$2,059 psf.
Phase 10 is to be put out at the third lowest per sq ft price in the LOHAS Park development.
On Tuesday, 24 letters of intent were received for Phase 10, which covers 85,843 square feet, and where two blocks are to be built, providing 1,170 units. Construction is expected to complete in 2022.
Centaline surveyor Victor Lai Kin-fai said the government has taken into account the recent downturn in the homes market in setting the premium, which is below market estimates.
Last month, a site at Au Tau in Yuen Long was withdrawn from tender because none of the 10 bids offered by developers met the reserve price set by the government. On Wednesday, a site in Sham Shui Po was won at below the market estimate at HK$4,294 psf.
Lai said recent land sales show developers are more cautious in buying land, and lowering premiums by the government may also reduce development costs.
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