“Six bids is a surprisingly good number given the major constraints at the site. It is more than what we expected,” said Hannah Jeong, head of valuation and advisory Services at Colliers. The government has yet to reveal the total number of submissions, and calls to the government Lands Department were unanswered.

Jeong said she had originally expected the tender would be withdrawn but now “it’s just the matter of the price”. The parcels of land, with an aggregate area of 145,303 sq ft, are located in Kai Tak, the site of Hong Kong’s former international airport. They went on sale by public tender on July 28.

She estimated the land price could be around HK$4,000 per square foot – more than 30 per cent lower than the previous tender in December won by CK Asset Holding in a neighbouring residential project.

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CK Asset beat five other developers with a bid of HK$8.7 billion (US$1.12 billion) for a plot on top of Sung Wong Toi MTR station. The price translated to HK$6,138 per square foot – the lowest for a residential parcel in the area in eight years.

Jeong believed developer interest could be tepid due to high borrowing costs and construction expenses.

Alvin Lam, director at Midland Surveyors had also expected bidding interest to be lukewarm amid rising interest rates and unsold inventories in the Kai Tak area.

“The key is whether the bids match the government’s reserve price,” Lam said. “When developers are conservative, the risk of the tender being withdrawn is higher.”

The Kai Tak Area 2A Site 2 and 3, close to Sung Wong Toi MTR station, is located close to the residential site acquired by CK Asset and a temporary public housing project.

It has a total permissible gross floor area (GFA) of about 992,000 sq ft. The parcel’s valuations, made by five surveyors tracked by the Post, ranged from HK$4,300 to HK$6,500 per sq ft, or a total plot value of HK$4.4 billion to HK$7.08 billion.

Alex Leung, senior director at CHFT Advisory and Appraisal, raised his estimate to HK$4,800 to HK$5,000 from the previous HK$4,600, after Sun Hung Kai entered the fray.

“Sun Hung Kai Properties joining the bid may be a variable in this tender as they may have a more competitive bidding price,” said Leung, who now sees a lower possibility of the tender being withdrawn.

Recent land tenders have received tepid responses from developers, as Hong Kong’s property market creaked under the weight of high unsold inventory and rising interest rates.

Last month, the land tender in Yau Kom Tau, Tsuen Wan, received just a single bid from Grand Ming Group Holdings. The government eventually rejected the bid as the “tendered premium did not meet the government’s reserve price for the site”, according to the Lands Department.

Under the conditions of sale, the purchaser must build an underground shopping street and various pedestrian links to proposed public housing developments in the neighbourhood.

The successful bidder must also construct various government accommodation, including a neighbourhood elderly centre, a hostel for mentally handicapped persons, a day activity centre, a district support centre for persons with disabilities and a boys’ home.

“The site itself has too many conditions to be met, and all these are really not profitable components,” Collier’s Jeong said.