HONG KONG, 5. Sept, 2011 /PRNewswire-Asia/ -- Vincent Cheung Kiu-cho,Cushman & Wakefield'snational director for valuation and advisory services said, "The global financial market remains volatile, and the bidding prices of Kau To Shan and Oil Street land acution are well below the market expectation. These may be disincentives for developers at the bidding. Despite proximity to Tseung Kwan O MTR Station and projects atop the station launching in near future, the height of the buildings to be built on the land plot at Tseung Kwan O will be lower than those in the district under strict building height limits. It is concerned that the ventilation and daylight of the project will be adversely affected. With six more land plots on the application list, totaling a 892,659 sq. ft., together with the 66A land plot, more than 2,500 flats will hit the market. Given that foreign economies are not out of the woods yet, and land supply is ample in the district, whereas the site comes with several restrictions, the number of flats to be built and height of the properties is restricted. It is therefore believed that developers will remain cautious during bidding. As a result, Mr. Cheung's estimation goes down by 12%, and expects the Tseung Kwan O Area 66A land lot will be sold at HK$3.476 billion, or HK$4,384 per sq. ft.
Cheung further points out that the site area of Tseung Kwan O Area 66A is about 144,000 sq.ft., with a total GFA of about 790,000 sq. ft. There are constraints where number of flats must range between 960 to 1,010. He estimates that five 25-storey buildings will be developed, with the average floor area of the units about 785 sq. ft.
The site area of Tan Kwai Tsuen, Hung Shui Kiu, Yuen Long, which goes under the hammer on the same day, is about 120,000 sq. ft., with a land plot ratio of 1, and a restriction on number of flats at no less than 170 flats is imposed. It is estimated that, similar to the residential projects in the nearby areas, the site will be developed into low-density residential buildings. Influenced by the previous two land auction results, and considering the fact that the land is located in the New Territories where it is more prone to market fluctuations, the estimated price therefore is revised downwards by 20% to HK$442 million, or about HK$3,669 per sq. ft.
The total GFA of Pak Shek Wo in Sai Kung, triggered for sale from the application list by a developer, is only about 3,731 sq. ft. Due to the small size and private residential development on the land plot, Cheung estimates that the selling price remains unaffected by the recent changes in the market. Also taking into consideration that properties in Sai Kung are transacted at high prices recently, the evaluation remains unchanged, with the selling price at about HK$91 million, or about HK$7,516 per sq. ft.
Land Auction on 6 September:
| Tseung Kwan O Area 66A | Tan Kwai Tsuen, Hung Shui Kiu, Yuen Long | Junction of Pak Shek Wo San Tsuen Road and Clear Water Bay Road, Sai Kung | |
| User | Residential R2 | Residential R3 | Private Residential |
| Site Area (sq. ft.) | Approx. 144,162 | Approx. 120,471 | 25,834 |
| Total GFA (sq. ft.) | Approx. 792,898 | Approx. 120,471 | 12,107 |
| Plot Ratio | Approx. 5.5 | Approx. 1.0 | Approx. 0.47 |
| C&W Estimation (Land Value) | HK$3.476 Billion (↓12%) | HK$442 Million (↓20%) |
HK$91 Million |
| C&W Estimation (A.V.) | Approx. HK$4,384/sq. ft. | Approx. HK$3,669/sq. ft. | Approx. HK$7,516/sq. ft. |
| C&W Estimated Unit Sales Price | HK$7,500/sq. ft. | HK$6,100/sq. ft. | HK$12,000/sq. ft. |
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Cushman & Wakefield is the world's largest privately-held commercial real estate services firm. Founded in 1917, it has 234 offices in 61 countries and more than 13,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies. It offers a complete range of services within five primary disciplines: Transaction Services, including tenant and landlord representation in office, industrial and retail real estate; Capital Markets, including property sales, investment management, investment banking, debt and equity financing; Client Solutions, including integrated real estate strategies for large corporations and property owners, Consulting Services, including business and real estate consulting; and Valuation & Advisory, including appraisals, highest and best use analysis, dispute resolution and litigation support, along with specialized expertise in various industry sectors. A recognized leader in global real estate research, the firm publishes a broad array of proprietary reports available on its online Knowledge Center at: www.cushmanwakefield.com.
