Jones Lang LaSalle, the property consultant handling the tender, said Merry Terrace at Seymour Road which has good harbor views, has a site area of 52,466 square feet. This gives a redevelopment potential of a maximum gross floor area of 472,194 sqft, based on a plot ratio of nine.

"Merry Terrace stands out as the only large private residential site available for sale in the traditional luxury area on the Island side," said Joseph Tsang Hon-ping, head of residential property at Jones Lang LaSalle.

An indication of the selling price can be gleaned from the government auction last month for No1 Broadcast Drive, a luxury residential site in Kowloon Tong which was sold to Sino Land (0083) for HK$1.94 billion, or 76.4 percent above the reserve price. That translates into an accommodation value of HK$9,868 psf. Tsang declined to reveal the reserve price for Merry Terrace.

If a round figure of HK$10,000 psf is used for accommodation value, then the site could be worth HK$4.72 billion.

Tsang pointed out the site had a 999-year lease that was virtually unrestricted in terms of development. "The value [of the site] is here," Tsang said.

The Mount Kellett Road site at The Peak which is due for public auction next Tuesday is far smaller in terms of allowable gross floor area at 42,658 sqft. Its reserve price is HK$768 million but the smaller GFA translates into a higher accommodation value of HK$18,000 psf.

Merry Terrace, completed in 1963, consists of five 14-story buildings with 196 residential units and 123 parking spaces. Tsang said more than 90 percent of owners have signed an agreement to sell the buildings, and he expects this figure to increase before the tender start date of January 2, 2007.

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