The tender of a residential site in Tuen Mun - the first land sale site to bear a minimum flat size requirement of 26 square meters - has been abandoned as the five bids submitted by major local developers all fell short of the government's reserve price.
This is the first time in 31/2 years that a government residential site tender has been aborted - the last was the tender of a luxury residential site on Mansfield Road at The Peak in October 2018.
The tenderers for the site were Henderson Land Development (0012), K. Wah International (0173), Sino Land (0083), Sun Hung Kai Properties (0016) and CK Asset (1113), the Lands Department said in a statement yesterday.
The government said it will not speculate on the considerations behind the bids placed by tenderers.
Bids are influenced by myriad factors, such as how individual tenderers assess the market conditions and the attractiveness of the site, as well as their corporate positions and development strategies, it added.
James Cheung, executive director at Centaline Surveyors, said he was surprised that the bid was abandoned but that the impact of the minimum flat size requirement may not be as great as many may think.
Cheung believes it was the relatively large scale of the project and the total investment amount coupled with the recent stock market volatility that made the developers conservative in their bids.
His comment was echoed by Alvin Lam Tsz-pun, director at Midland Surveyors, who also thinks it was the mega investment scale rather than the flat size stipulation that worried developers.
The property market had just come out of the shadows of the fifth wave of the Covid outbreak, so developers were naturally cautious in their bids, Lam said.
The land - Tuen Mun Town Lot No 561 - has a site area of about 33,713 sq m and homes with a maximum gross floor area of 121,367 sq m are expected to be built upon it.
Its market valuations range from HK$7.4 billion to HK$8.5 billion, or HK$5,600 to HK$6,500 per sq ft.
Notwithstanding the cancellation of the tender, the government will continue to apply the minimum flat size requirement to government land sale sites, railway property development projects and projects of the Urban Renewal Authority, as well as lease modification/land exchange applications for private residential development projects, a spokesman for the Development Bureau said.
Doing so aims to enhance living space and respond to the aspirations of society, the spokesman said, adding that many tender exercises mounted by the URA and MTR Corporation for sites with minimum flat size requirements have been successfully concluded.
The authorities' policy objective is to provide a steady and sustained land supply to the market to cater for the community's housing needs.
This objective will not be affected by the results of individual tender exercises or the economic situation of a certain time, the spokesman said, and the tender will be rolled out again at an appropriate time.
Source: The Standard