LI, Tao @ Hong Kong

An auctioneer (left) awaits new bids during Tuesday’s public land auction. Provided to China Daily

A site in Hong Kong’s Peak district was sold for HK$1.82 billion in an auction Tuesday, which translates into a record-high unit price of HK$68,200 per square foot of finished gross floor area for property sold at public auction.

Martin Lee, vice-chairman of Henderson Land Development Co and son of tycoon Lee Shau-kee, who bagged the luxury site after beating rivals, told media after the auction that he plans to build a luxury house on the site for a family residence.

The accommodation value of nearly HK$70,000 for the 53,350 square-foot site in 35 Barker Road, The Peak is believed to be a new record high in the city’s history of luxury land auctions, said Joseph Tsang, auctioneer and International Director and Head of Capital Markets at Jones Lang LaSalle, a major real estate consultant firm in Hong Kong.

The HK$88,000 per square foot paid for another Henderson-owned property, a Conduit Road luxury apartment sold last year, still holds the record for a non-auction sale.

“Today’s auction results reflect that the ‘super’ luxury residential property market remains intact following the government’s implementation of new (tightening) measures targeting the property market, while the transaction price will have an ‘indicative’ meaning for the future trends. We expect that the luxury residential market will remain positive,” Tsang said.

The price beat analyst estimates that ranged from HK$1.2 billion to HK$1.3 billion, and the per-square-foot price also exceeded the sellers’ expectations, said Tsang.

“This shows that the outlook of the luxury market is still positive,” said Tsang. “After redevelopment, the site could be resold for more than HK$100,000 per square foot,” he added.

However, some real estate analysts believe the winning bid has no indicative meaning for the outlook for the whole property market, as the buyer plans to build a new house on the site as a private residence rather than for resale.

“The winning bid could not serve as an indicator for Hong Kong’s property market, as the site was bought for personal use, and not sold at a market price,” said Wong Leung Sing, research head at Centaline Property Agency Ltd.

Wong said the prices other developers offered for the site during the auction may be closer to its market price, as they have to count the costs carefully if they want to develop the site for resale.

To cool the city’s over-heated real estate market, the Hong Kong government in April announced a series of measures to curb possible price manipulations by developers in new project launches.

Financial Secretary John Tsang also announced earlier that the government will accelerate government land auctions this year.

China Daily

(HK Edition 05/19/2010 page3)

http://www.chinadaily.com.cn/hkedition/2010-05/19/content_9865332.htm