Six residential sites located at Ma On Shan, Cheung Sha in Lantau Island, Tai Wai, Kwai Chung, Sham Shui Po and Tuen Mun, will be sold by open tender

The government will release six residential sites to be sold in the coming quarter to provide 1,250 apartments. Together with the projects tendered by MTR Corporation and the Urban Renewal Authority (URA), 16,800 units will be provided at the end of the third quarter this year to reach almost 90 percent of the government's yearly target of 18,800 apartments.

The six private residential sites, which are located at Ma On Shan, Cheung Sha in Lantau Island, Tai Wai, Kwai Chung, Sham Shui Po and Tuen Mun, will be sold by open tender.

The MTR Corporation will also release its Tin Shui Wai light rail station residential project and other new phases of the LOHAS Park, providing no less than 4,600 units, and the URA's redevelopment project in Sham Shui Po will provide 850 units as well.

The government said that the coming land sale program in the third quarter this year will provide approximately 6,700 private residential units in total.

"The government has identified 150 potential housing sites in various districts requiring change in land use or increasing development intensity. These sites are capable of providing 210,000 units in the next five years, with about 70 percent for public housing," said Secretary for Development Paul Chan.

He also said the most effective way to increase land supply in the short-to-medium term is to make use of developed areas in urban areas and new towns, and land in the vicinity of existing infrastructure.

Noticeably, an industrial site in Kwai Chung will also be sold, the first since September 2000. Two commercial sites in Kwun Tong and Kwai Chung will also be tendered in the coming quarter.

Chan said the increasing labor cost on the mainland and the appreciation of the renminbi have prompted Hong Kong businessmen to reconsider moving high-value processes back to the city. The industry also has expressed interests in purchasing more industrial lands in Hong Kong.

In terms of the recent price hike in small- to medium-size apartment market, Chan said the government has already noticed the problem and will not remain indifferent. He also appealed for more understanding towards their ongoing effort on redeveloping land for residential usage.

Among the six newly released residential sites, James Cheung, the executive director of Centaline Surveyors Ltd, expected that the land in Lung Cheung Road, Sham Shui Po, which is the only one in the urban area and also located at traditional luxury real estate zone, will soon be market spotlight and the most popular among bidders. The land value is expected to reach HK$10,000 per square foot.

As tenders of MTR Corporation's residential projects in Tai Wai station and Tin Shui Wai Light Rail Terminus had earlier failed, Buggle Lau, chief analyst at Midland Realty, expressed caution towards the future tender of such projects. "Apartments in the railway residential projects take up more than half of the overall supply. If the government wants to succeed in railway residential projects tender, I believe the land price will be the core concern," he said.

Other market analysts said that although the government is active in its land redevelopment and supply plan, the new land sale program still shows a two-way stretch. "The previous abortion in MTR residential projects tender has prompted the government to study a plan B. I believe that's why this time two sites in Tuen Mun were newly added, so as to compensate for possible tender failure," said Vincent Cheung, national director of Greater China at Cushman & Wakefield.

The Rating and Valuation Department announced earlier this month that the monthly price index for private homes rose for the fourth straight month in July and climbed to 255.6. Centaline Property Agency's Centa-City Leading Index (CCL) also suggests that Hong Kong has entered the second property price rising cycle.

Midland Realty also estimated that the number of registered first-hand private apartments to 16,000 this year, reaching a record high since 2008. The overall registered transaction value is expected to achieve the highest in 19 years, exceeding 2012's number of HK$132.2 billion.

However, a report released by Commercial Real Estate Services (CBRE) last month pointed out that Hong Kong's lack of industrial land has led to warehouse stock vacancy rates hitting a new low of 0.4 percent as of June this year, decreasing from 1.1 percent at the end of 2013.

agnes@chinadailyhk.com

(HK Edition 09/25/2014 page5)