HONG KONG, Jan 13 — The failed sale of a development site in Hong Kong’s New Territories is a further indication of caution among Hong Kong developers as home prices in the city soften, market watchers say.
“Developers are more cautious on the property market outlook for the next two to three years,” said Patrick Wong, Hong Kong property analyst at Samsung Securities.
Yesterday, MTR Corp said the offers for its site t the Bayside in Tsuen Wan had been refused.
A spokesman said today that it planned to tender the project again at a later date, although the company had yet to decide when.
Wong said with property prices falling in the city, developers were more picky about sites, favoring central areas on Hong Kong Island and in Kowloon, rather than New Territories neighborhoods such as Tsuen Wan.
The Hong Kong government has committed to delivering land for 20,000 flats per year, although it said in December that it would increase the amount of land it sells this fiscal year, ending in March, after hitting its target early.
According to a South China Morning Post report today, the MTR tender drew bids from Hong Kong’s biggest developers, Sun Hung Kai Properties Ltd and Cheung Kong (Holdings) Ltd, as well as Sino Land Co Ltd and a consortium of New World Development Co Ltd, Nan Fung Development and Wheelock Properties. MTR did not disclose the companies bidding for the project.
Chinachem Group won a separate, smaller tender in Tsuen Wan, next to its headquarters. It said it had bid conservatively on the project, which it won for US$335 million (RM1.051 billion).
Also yesterday, the Lands Department said Fortune Precision, a subsidiary of Wheelock Properties, the property arm of Wheelock & Co Ltd, won the tender for a residential site in Tseung Kwan O for HK$1.86 billion.
Analysts noted that bids for all three sites were low.
Brokerages have so far born the brunt of the slowdown rather than developers. Shares in Hong Kong property brokerage Midland Holdings Ltd were down 6.6 per cent today morning, after the company warned yesterday that would post a loss for the second half of last year.
Shares in MTR Corp were up 0.2 per cent today morning, despite the company withdrawing the Bayside tender. The Hang Seng Index was flat.