In another sign that the market is maintaining confidence in the property market, the government has announced Friday that the sale threshold for a waterfront residential site in Tung Chung in Lantau Island has been triggered for public auction.

The auction will be held at the Queen Elizabeth Stadium in Wan Chai on May 11, with the site guaranteed to fetch at least HK$2.876 billion. Secretary for Development Carrie Lam said the site will provide about 1,700 residential units.

"If the real estate sector sees demand in the market, then developers are ready to buy land from the government," Lam said, adding that it shows the government's land application system is effective.

Market experts said the land cost is about HK$2,000 per square feet. Based on properties neighboring the site to be auctioned, it could be developed into a residential project worth over HK$5 billion in total, with units selling at about HK$5,000 per square feet.

The Lands Department announced Friday that the sale threshold for a site at Tung Chung Area 55b, Tung Chung Town Lot No.37 had been successfully triggered for sale under the Application List System. It will be the first government land auction in the 2010-2011 financial year.

The site has an area of about 26,200 square metres. The minimum gross floor area and the maximum gross floor area for private residential purposes are 78,600 square metres and 131,000 square meters, respectively.

A Lands Department spokesman said Friday that the Government had accepted the applicant's minimum guaranteed bid of HK$2.876 billion for the lot. This will be the opening bid at the auction subject to the reserve price of the lot.

The last time the government held a land auction was December 28 last year, which was the first major land sale held by the government since October 2007.

Two adjacent 2.1-hectare sites, both prime waterfront sites in Tai Po in the New Territories, were sold at HK$5.15 billion and HK$5.25 billion, respectively, to a consortium that included Sino Land at record unit prices for the district.

China Daily

(HK Edition 03/27/2010 page2)