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The last two sites for the 2021-22 programme offer some changes

Hong Kong blog CIVAS Land Sale 2204 1536x1040

This month’s Land Sales Programme reviews the commercial site at Area 57 in Tung Chung and the residential site on Castle Peak Road – Tai Lam in Tuen Mun. Both are the last of the April 2021 to March 2022 Land Sale Programme. Area 57 was retendered, with a broader scope of use, while Castle Peak Road will be the first development under the government’s new minimum flat size regulations.

SOLD | Area 57, Tung Chung (TCTL 45)

This site was initially tendered in October 2020; however, it was cancelled as all three bids fell below the government’s reserve price.

Those tenderers in alphabetical order were:

  1. Conford Investments Limited (CK Asset Holdings Limited);
  2. Dynasty Asia Limited (Sino Land Company Limited and Kerry Properties Limited); and
  3. Topco (HK) Limited (Sun Hung Kai Properties Limited)

The site was retendered with bids closing on 25 March 2022, when it was awarded to Chinachem for HKD 2,778,000,000. The four other bidders were CK Asset Holdings Limited and Sino Land Company Limited, in their second attempt, and newcomers K&K Property Holdings Limited and K. Wah Properties (Holdings) Limited. The increase in tenders was a good sign of improved interest from the private sector.

Property Area 57, Tung Chung, New Territories
Lot Number Tung Chung Town Lot No. 45
Zoning Commercial (1)
(Under Conditions of Sale)
Non-industrial (excluding residential, hotel, godown and petrol filling station)
Site Area 132,774 sq. ft. (12,335 sq. m.)
Maximum GFA
(Under Conditions of Sale)
1,261,347 sq. ft. (117,182 sq. m.), of which the GFA for retail use shall not exceed 378,398 sq. ft. (35,154 sq. m.)
Maximum Plot Ratio 9.5
General Market Expectation
(before Tender)
HKD3,000,000,000 to HKD5,045,000,000
(AV: HKD2,378/sq. ft. to HKD4,000/sq. ft)
Transacted Price HKD2,778,000,000 (AV: HKD 2,202/sq. ft.)

Area 57 in Tung Chung is zoned as “Commercial (1) under Approved Tung Chung Extension Area Outline Zoning Plan No. S/I-TCE/2. This zone is intended primarily for commercial developments, which may include offices, shops, services, places of entertainment, eating places and hotels, functioning as territorial business/financial centre and regional or district commercial/shopping centre.” These areas are usually significant employment nodes. The site has a plot ratio of 9.5, which indicates a maximum commercial gross floor area of 1,261,347 sq. ft.

Tung Chung is situated in north Lantau and is one of the most recent New Towns. It is predominantly a well-established residential area dominated by several large-scale private residential developments and public housing estates, including The Visionary, Yu Tung Court and Caribbean Coast. Since the 2000s, Tung Chung has grown into a town comprising private and public housing developments and commercial areas. The opening of 11 Skies, together with Citygate, will boost the town’s commercial activity by attracting tourists and visitors once travel restrictions are relaxed.

Hong Kong blog CIVAS Land Sale 2204 map1

(source: Google Maps and Lands Department)

The site’s accessibility is poor at present, as the proposed Tung Chung East Station is only expected to open in 2029. Its previous uses being limited to office and retail may explain why it was met with minimal interest in 2020. However, in this tender, the site can also be used for data centre purposes, broadening its development potential. The land premium was at the lower end of market expectations. However, the area has much to offer long-term, given its accessibility to the GBA and the airport.

UPCOMING | Castle Peak Road – Tai Lam, Tuen Mun, New Territories

The Lands Department announced on 18 March 2022 that Tuen Mun Town Lot No. 561 at Castle Peak Road – Tai Lam, Tuen Mun, will be disposed of by public tender, with invitations commencing on 25 March 2022. Tuen Mun Town Lot No. 561 is the first site in Hong Kong that falls under the new government restrictions on the minimum size of residential units.

Property Castle Peak Road – Tai Lam, Tuen Mun, New Territories
Lot Number Tuen Mun Town Lot No. 561
Zoning Private residential purposes
(Under Conditions of Sale)
Private residential purposes
Site Area 362,884 sq. ft. (33,713 sq. m.)
Maximum GFA
(Under Conditions of Sale)
1,306,381 sq. ft. (121,366.8 sq. m.)
Maximum Plot Ratio 3.6
General Market Expectation
(before Tender)
HKD7,840,000,000 to HKD8,490,000,000
(AV: HKD6,000/sq. ft. to HKD6,500/sq. ft)
Tender Closing Date Noon on 22 April 2022


The site abuts Castle Peak Road – Tai Lam to the south. The area is predominantly a mountainous residential neighbourhood dominated by private developments such as The Aegean, The Hillgrove and Peak Castle. Tuen Mun Town Lot No. 561 is zoned as Residential (Group B) 2 under the Approved So Kwun Wat Outline Zoning Plan No. S/TM-SKW/13. According to the notes attached, this zone is intended primarily for sub-urban medium-density residential developments in rural areas where commercial uses serving the residential neighbourhood may be permitted on application to the Town Planning Board.

In February 2022, the government announced that homes built on government-tendered land would have to have a minimum of 280 sq. ft in saleable area. The restrictions came into force on February 25, making Tuen Mun Town Lot No. 561 the first residential site to incorporate this restriction in the Conditions of Sale. Announcing the cap, Secretary for Development Michael Wong said the ruling extended to all government land sales, railway property development projects, URA projects, lease modifications and land exchange applications by private developers.

The government indicated that the measure would not substantially impact property prices and housing supply. However, there will be a significant change in the number of studio flats built. New developments such as The Carmel, Oma Oma, Emerald Bay Phases 1 & 2 and The Royale Phases 1, 2 &anp; 3 located near the site all have studio flats under 280 sq. ft. Emerald Bay Phases 1 & 2 has the most, with 578 studio flats making up 29% of its units.

Based on newer residential developments in the area, such as Oma by the Sea, Emerald Bay Phase 1 & 2 and The Carmel, we expect the site to sell for around HKD13,000 to HKD19,000 per sq. ft. Most recent government land sale transactions in the area include TMTL 518 and TMTL 549, transacted in January 2020 and August 2019. Kaisa Group and K&K Property successfully acquired the sites at an AV of HKD6,005/sq. ft. and HKD6,499/sq. ft, respectively. Although these two transactions' location, size, and conditions differ from the subject, they provide a good reference for land values. The general market expectation on this site’s tender is approximately HKD7.84B to HKD8.49B (AV: HKD6,000/sq. ft. to HKD6,500 sq. ft.)

Hong Kong blog CIVAS Land Sale 2204 map2

(source: Google Maps and Lands Department)

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Hannah Jeong

Head of Valuation & Advisory Services

Valuation & Advisory Services

Hong Kong

Hannah Jeong has extensive valuation & advisory services experience over 15 years including property investment and development projects specialising in valuation, development consultancy, financial analysis and feasibility studies. Project’s geographic coverage span across Asia Pacific and Middle East, in particular Hong Kong, China and Korea. She has started her career with Colliers since 2006 and is now heading our Valuation and Advisory Services - Hong Kong Office with over 40 professionals.

Hannah has strong client coverage on major financial institutions including global real estate funds and private equity firms.

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