A surveyor commented that the aborted bids for the Stanley site, despite a significant reduction in the valuation, reflected that developers were still cautious about the property market outlook and were still testing the government's reserve price.
A government spokesman said he would not speculate on the bidders' considerations and said the aborted bid would not affect the land supply target for this year.
Tenders for the residential site at Cape Road, Stanley, closed last Friday and four bids were received, all from consortia including Cheung Kong Holdings, Sun Hung Kai Properties, K. Wah International and Sino Land in a joint venture with Ying Kwan.
The Lands Department announced yesterday that it would not accept the four bids because they did not meet the Government's reserve price, and declared the site aborted.
This is the second time in a year that a tender for a government site has been lost. The last aborted tender was for a residential site on Castle Peak Road in Tuen Mun, which was lost on 26 April last year and subsequently relaunched in October last year and won by Cheung Kong Holdings.
In fact, the market for luxury residential land in Stanley was originally estimated to be between $11,000 and $20,000 per square foot, valued at about $5.28 billion to $9.6 billion, a significant drop of 53% to 56% from the $11.9 billion to $20.6 billion valuation in September last year, four months ago, when the government announced its land sale programme.
A government spokesman said yesterday that he would not speculate on the considerations of the bidders' bids, and that the government's policy objective was to provide a stable and sustainable supply of land to the market in response to the community's demand for housing and economic land. This objective will not be affected by the outcome of individual land tenders or by the economic situation at any given time.
The spokesman emphasised that despite the cancellation of the current tender, the supply of land for private housing this year has already exceeded this year's supply target.
Mr Cheung Chiao-chor, managing director of consultancy and valuation, said that the difference between luxury land and ordinary residential land is that there are more transactions for ordinary residential land and it is easier for the government and the market to obtain the best valuation for the market, while the scarcity of transactions for luxury land and the wide price difference between different luxury properties make it more difficult for the government and the market to obtain a market-beating valuation, hence the aborted bids.
Mr Cheung said that he could not rule out the possibility of developers "talking business" and testing the Government's reserve price while the property market has not fully recovered.
Centaline Property Surveyor Cheung King Tat said only four bids were received for the site last week and the response was mediocre. Earlier, the valuation of the site was lowered in response to market conditions, but the bid was still aborted in the end, reflecting the developer's prudence in bidding, believing that the location of the site was not the best lot in Stanley, with Ma Hang Estate, a public housing estate opposite, not being developed into a first-tier luxury property.
According to the information, the site is located to the south of Ma Hang Estate and is the largest site in the area in 20 years.
The site covers an area of over 257,264 square feet. The project has a total gross floor area of approximately 480,245 square feet, excluding the residential care home for the elderly and associated parking facilities to be built by the successful consortium in accordance with the terms of the land sale, and is expected to provide approximately 640 units for a development period ending 31 March 2029.
In view of the uncertainty of the current market and economic outlook, as well as the potential slope risk of the site, the developer may need to allow additional costs and time to deal with the issue, and a number of surveyor firms have earlier lowered the valuation of the site significantly.
A review of the information shows that the last site sold in the district was the One Stanley project in 2016, with 226,044 square feet of buildable floor space, which was sold for $2.811 billion at a land premium of about $12,436 per square foot.
By way of comparison, the earlier market valuation of the residential site at Wan Kok Road is already equivalent to the land value in the area seven years ago.
As for the 82-unit ONE STANLEY project, which will be launched in the first quarter of this year at the earliest, the aborted bid for the site is expected to have an impact on the pricing of the project.
