Cushman & Wakefield Vincent Cheung: Expects Tender Process of Tung Chung Site with Flat Size Restrictions to Invite Much Competition Among Developers

HONG KONG, June 28, 2011 /PRNewswire-Asia/ -- The Hong Kong Government has recently been very proactive in putting forward land for tendering instead of awaits land sale by application, which has been a tradition for years. Among the sites put forward for tendering earlier, the Tung Chung site is the biggest in size and will be the focus of attention in the market.

Mr. Vincent Cheung, Director, Head of HK Team, Cushman & Wakefield, reflected that total area of the Tung Chung site reaches 273,406 sq.ft., which will allow a maximum buildable area of 1,367,028 sq.ft. and a plot ratio of 5. With this piece of land, the Government can provide at least 2,020 residential units ranging from small-to-medium sizes to people in need. The Government requires the building of a minimum of 1,650 units with sizes ranging from 377 sq.ft to 484 sq.ft. and 370 units with sizes ranging from 484 sq.ft. to 646 sq.ft. Cushman & Wakefield estimates a price of HKD3,554,000,000, with buildable area reaching approximately HKD2,600 per sq.ft. Cushman & Wakefield forecasts the site can contain 10 blocks of 42-storey high residential buildings, with selling price reaching HKD6,000 per sq.ft. upon completion.

Mr. Cheung believes as Nam Fung Group has acquired the 55B land site right next to this piece of land earlier, this developer is very likely to compete eagerly for the land, aiming to combine the sites together for further development. Or else view of apartments built on 55B site will be much affected by future development of this 55A site. Although there is ample supply of small-medium flats in the adjacent area, like Caribbean Coast, yet average price still maintains at HKD5,000 per sq.ft. Taking into account all development costs, its profit-earning potential is still high and so developers are expected to be very eager to join the tender process.

Appendix: Cushman & Wakefield site valuation and project development forecast

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