Mount Nicholson government quarters taken by the Google Street View car

(China Daily, July 29, 2010) On Wednesday the Hong Kong government auctioned a prime residential site on the region’s prized Peak for HK$10.4 billion, a sky-high unit price of HK$32,000 per square foot of gross floor area. The transaction added considerable steam to the local residential property market.


The project could end up including units for sale at HK$40,000 per square foot of finished gross floor area, if its proprietors develop it into high-rise apartments. It could even end up selling units for HK$60,000 to HK$70,000 per square foot, if the proprietors develop the project into individual houses, estimates Alvin Lam, executive director of Midland Surveyors Ltd.

The 251,000-square-feet site on Mount Nicholson Road, one of the most exclusive residential areas in Hong Kong, could be developed into a project holding a maximum gross floor area of 325,000 square feet.

The winning bid of HK$10.4 billion is consistent with analysts’ price estimates of HK$8.9 billion to HK$11.5 billion, which rose as the auction date approached.

Privately-held developer Nan Fung Group bought the site after a 45-minute competition with blue-chip developers New World Development Co and Sino Land Co. Developers, such as Cheung Kong (Holdings) Ltd, kept a low profile, even though before the auction they had shown interest in acquiring the plot.

Nan Fung will develop the site with Wharf (Holdings) Ltd in a 50-50 venture, said Donald Choi, the firm’s managing director, who described the winning price as “reasonable”, citing the “uniqueness” of the site in a “very rare” location.