'Failed tender shows developers want more incentives'
The chairman of Professional Property Services, Nicholas Brooke, says a failed tender for a residential plot in Chai Wan on Wednesday suggested the government didn't provide sufficient incentives for developers to take on one of its subsidised housing projects. The tender for the Cheung Man Road site was withdrawn after only one bid was received and it failed to meet the reserve price. It involved 700 units with the government setting the price at 65 percent of the market value - with any unsold units being kept by the developer to sell.  "Honestly, it's not really a developer-type opportunity," said Brooke, who was speaking on RTHK's Hong Kong Today programme. "I think it's more a construction play and if they want to involve the development community then there has got to be more incentive. And I think that that incentive would mean that every scheme of this nature would have to include some private sector units as well, so the developer would be rewarded." The government has said it wants to tender out three sites under its Private Subsidised Sale Flat Pilot Scheme. Announced last year, it is designed to complement the government's Home Ownership Scheme by bringing in private developers to boost building capacity for subsidised homes. Brooke said the private sector should still be involved in subsidised housing construction but that some changes may be needed from the government given the weak property market. "I think they need to look at the backcloth and the general conditions in the market very closely before they go to tender with the next site," he said. "The package needs revisiting if you like. We need to involve the private sector in the production of subsidised housing so the scheme is important. But I think this was a test and I hope the government will learn from that and fine-tune, if you like, the next proposal." The government has said it will continue to assess the market’s development, and may adjust the pilot scheme’s parameters, and future tender arrangements for sites, if such actions are found to be necessary. It also said it would continue to encourage private developers to participate in the pilot scheme under the private land approach. Under the scheme, land can be developed through public tendering or through the use of private land.