Market speculation is that many developers may have given up bidding for the project due to "miscalculation" and there is a high chance of the project being aborted. Some surveyors have suggested that the project should be converted into a residential development, but the government has stated that it will not sell the site cheaply even though it will follow the market.

Tenders for the Kwun Tong Town Centre Development Areas 4 and 5 (Yue Man Square commercial project) closed yesterday. Although the URA invited 19 developers and consortia to bid for the project, only one consortium, SHKP, was selected, making it the worst bid received in 15 years.

The last time the URA received only one bid for a project was in April 2008 for the Bega Circuit site in Hung Hom (i.e. the current site of the Royal Residences), followed by 229A to G Hoi Tan Street in Sham Shui Po (i.e. the current site of Oi Hoi Son) in 2014, for which only two bids were received.

In fact, although the property market has rebounded recently, the market is still cautious about the economy and the outlook of the property market. Apart from the aborted bid for the official residential site in Stanley the day before yesterday, the Government awarded the Kai Tak site in the middle of last month at a price of only $6,138 per square foot of floor area, which is back to 8 years ago and 23% lower than the lower limit expected by the market.

The market's current valuation of the Yue Man Square commercial project has been significantly revised downwards, with the latest valuation ranging from approximately $8.7 billion to $13 billion at a price of $4,000 to $6,000 per square foot of floor area.

This is a significant drop of 43% to 50% from the valuation of $15.16 billion to $25.9 billion and a floor area price of $7,000 to $12,000 per square foot when compared to the Invitation for Proposals in August last year.

Leung Pui-wong, a surveyor and senior director of Wah Fong Consulting and Valuation, pointed out yesterday that the response to the bids for the Yue Man Square commercial project was even cooler than expected.

He said the URA needs to be financially self-sustaining and if the final bid is too low, it would be better to apply to the government for conversion into a shopping mall and residential development, and did not recommend awarding the project at a "low price".

Leung Pui-wong continued, saying that the project is a quality site that will be connected to the Kwun Tong MTR station and apm. In order to support the development of Kowloon East CBD2, the project had a commercial building element in the proposal back in 2006.

However, in recent years, driven by the policy of revitalising industrial buildings, it is envisaged that there will continue to be a large supply of new commercial buildings in Kowloon East.

The outline plan also shows that the northern area of the MTR Kwun Tong Line is basically for residential use and the southern area for commercial use, so the change of use of the project would not be incongruous with the surrounding area.

He said that the plot ratio could be maintained at a similar level if the project was changed to commercial and residential use, and the land value of the project could reach $18 billion.

It is also worth noting that Yue Man Square (YM2), a shopping mall with a total area of over 350,000 square feet and public facilities, has been completed in Kwun Tong in recent years.

The Millennity, which has just been completed by SHKP and JETCO International, also offers approximately 500,000 sq ft of retail space.

Together with the 700,000-square-foot shopping mall in Kwun Tong Town Centre Development Areas 4 and 5, the new mall alone will provide 1.55 million square feet of floor space, not counting the long-established apm and other retail space.

The Financial Secretary, Mr Paul Chan, said yesterday in response to the aborted bid for the Stanley residential site that the 13% fall in property prices between January and November last year was an orderly adjustment that was only slowly coming down, and that he was not surprised that the bid for the Stanley luxury site was aborted, and that the Lands Department sets the reserve price for each government land sale according to prevailing market conditions, and that in a property market adjustment, land prices usually fall faster than property prices, with individual government sites falling by quite a lot.

He also said that the government does not have a high land price policy and sells land according to the market, but it does not need to sell cheaply, and will not be anxious to adjust the land price to sell land because of the large fiscal deficit.

The Kwun Tong Town Centre project is the largest single redevelopment project ever undertaken by the URA and is being developed in five areas in phases.

The site was formerly part of Yue Man Square and has a site area of 275,500 square feet. The estimated maximum gross floor area upon completion of the project is 2,165,900 sq ft.

The URA invited 19 developers and consortia to bid for the site in November, after receiving a total of 24 expressions of interest when the project closed in September last year.