Tuen Mun land price surpasses market expectations by 10%

The land price appears to be rebounding.

After drawing 51 total bids, two land sites in Tuen Mun were both sold for higher-than-expected prices.

According to a research note from Barclays, CSI Properties won the larger 80,477sf GFA site at Yan Ching St with a bid of HK$427.1mn.

The land price of HK$5,307psf was 17% higher than the top end of market expectations.

Further, CSI Properties expects total investment for the project at around HK$900-1,000mn and intends to begin presales in 2016.

Here’s more from Barclays:

Surveyors believe that even factoring in 10% GFA concession, total investment costs are likely to reach

HK$10,200psf and the future sales price will need to reach HK$15,300psf on SFA terms in order to achieve a 20% margin, some 40% higher than the HK$11,00psf that Century Gateway was sold for earlier.

The smaller 13,487sf residential site at Lok Chui St, Tuen Mun was awarded to a private company related to the family owners of Asia Standard.

The winning bid of HK$156.4mn translates to an AV of HK$11,599ps, setting a new record high for the Tuen Mun area.

The AV was 12% above the top end of market estimates. Surveyors attributed the higher-than-expected bid to the ability to build standalone houses in the area and the previous positive response to SHKP's Seafront development.