【研究报告内容摘要】
Last site in Kau To fetched at HK$6,837 psf: The Lands Departmentannounced that the land tender of Sha Tin Town Lot No.578 in Area 56A, KauTo, was awarded to Paliburg and Regal Hotels at HK$2,390 million, or AV ofHK$6,837 psf, based on a reported GFA of 349,547 sf. Excluding the unitrestrictedsite acquired by Sino Land and Kerry back in August 2011, this is thelowest among the 7 other sites disposed in 2012 and 2013 in Kau To areawithout development restrictions. On the other hand, Sino Land acquired asmall site in Wanchai (reported GFA of 11,194 sf) for HK$140 mn ofHK$12,497 psf on reported GFA.
Land cost is 18% below recent transaction: The AV of Kau To site is 18%below the land price paid by Chun Wo Development two weeks ago for Lot 579and below market expectation of HK$7,000-8,000 psf. According to HKET,Paliburg plans to build some 30 townhouses and over 100 apartments with atotal investment cost of HK$4.2-4.5 bn. There are altogether 8 bidders for thesite, including Cheung Kong, SHKP, Sino Land, K Wah and Wheelock.
Implications:
Lowering risk appetite of developers: Other than Tseung Kwan O, Kau To is akey area of land supply in the past 1-2 years. The land price in that area peakedat HK$10,885 psf in March 2013 when SHKP bought Lot 566, site B2. Thetransacted land price of each site after that has trended down every time.
Compared with the peak, the AV of Lot 578 sold yesterday was 37% below thepeak price, implying certain projects could be loss making. This indicates thatdevelopers are lowering their risk appetite and adjusting up their required returnwhen they acquire new projects.
Smaller developers are keener on land acquisitions: The recent land tenderswere mainly awarded to smaller developers such as Wing Tai, Chun Wo,Paliburg, implying that the larger players are more conservative in terms ofpricing. In particular, Cheung Kong has not won any land tender in 2013. Goingforward, when large-scale projects such as MTR projects are put up for tender,there is a possibility of site withdrawal or the site selling at a low price.
Site-specific factors affecting decline in land price: The falling land cost ispartly attributed to the less desirable view and higher development density of theproject. With a plot ratio of 1.86x, the project cannot be developed as a puretownhouse project and apartments will yield a lower ASP compared totownhouses.
Wanchai site providing pricing support for upcoming project The Avenue:The site at Wanchai that Sino Land acquired is relatively small to represent thedeveloper's view on the market. It may somehow suggest that developers aremore positive on urban area residential market. In fact, we think the AV atHK$12,497 psf could provide pricing support for their upcoming JV residentialproject The Avenue in Wanchai, which is expected to launch in 4Q13.