The Government today announced that it has rejected the only tender received for a Chai Wan site marked for the development of private subsidised sale flats as the tendered premium did not meet its reserve price for the site.

The Chai Wan site, at Cheung Man Road, was the first to be put up for public tender under the Private Subsidised Sale Flat Pilot Scheme.

In mid-2023, with a view to enhancing overall development capacity, the Government announced a policy framework for the pilot scheme outlining how private developers can participate in the development of subsidised sale flats (SSFs).

There are two approaches for development under the scheme, namely the public tendering approach and the private land approach.

A tender invitation on the Chai Wan site was issued on March 28. The Government received one tender by the closing date of July 19.

It said the policy framework had been formulated in consideration of various factors, as well as the views of stakeholders. Factors considered included the need to provide more choice in SSFs, the positioning of private SSFs in the marketplace, and attractiveness to developers.

The Government said it believes the arrangements provide sufficient incentives for developers to participate, while ensuring quality. It stressed that the scheme’s key parameters are clearly set out under the policy framework, and that its requirements are reflected in the land sale conditions.

The site is on a moderate scale and would enable the provision of not less than 700 private SSFs.

Pursuant to the policy framework, flats under the scheme are to be sold at 65% of the market price, or at a 35% discount, as reflected in the Lands Department’s assessment of the reserve price for the site.

The Government said that in view of its urban location and close proximity to an MTR station, the site provides a suitable opportunity for developers to participate in the development of private SSFs under the pilot scheme.

As with other land sale sites tendered by the Government, bids are influenced by many factors, including how bidders assess market conditions and a site’s attractiveness, as well as their own corporate strategies.

The Government said it will continue to assess the market’s development, and may adjust the pilot scheme’s paramaters, and future tender arrangements for sites, if such actions are found to be necessary.

It added that it will also continue to encourage private developers to participate in the pilot scheme under the private land approach.