Developers' Inventory and Rising Costs Impact Sha Tin Land Tender Bids

Developers Contend with High Inventory Levels

In the latest land tender for site STTL 625, located at the junction of Sha Tin Wai Road and Siu Lek Yuen Road, a total of six leading developers submitted bids, including Sun Hung Kai Properties (SHKP), Wheelock Properties, Chinachem Group, CK Asset Holdings, and Sino Land. The site covers an area of 5,652 square meters and is slated to offer around 570 residential units. However, experts at Colliers have noted that the response appears lukewarm, attributing this to developers' substantial inventories and high construction costs.

Market Concerns Highlighted

Kathy Lee, head of research at Colliers, commented, "The bidding was lukewarm due to substantial existing inventories, prompting developers to focus on selling current stock while being cautious about new site acquisitions." Estimates suggest approximately 108,000 units will be available in the next three to four years. In the previous quarter, 21,000 unsold units alongside 77,000 under construction indicated a trend towards over-supply.

Geographical Challenges of Site STTL 625

Evaluated by Midland Surveyors at an estimated valuation of HK$1.07 billion, site STTL 625 has raised concerns due to its remote location from crucial amenities and proximity to industrial zones. Lee expressed that being near a soda factory and bus depot could impede the site's marketability.

Pivotal Future Tender Introductions

Looking forward, the government plans to introduce another residential plot in the current quarter on Mei Tin Road, which is expected to support around 360 flats. This introduction occurs as the government is keen to enhance market feedback responsiveness with revised tender terms, an effort to engage developers and achieve its annual land sale revenue goals.