Does Hong Kong need some kind of anti-trust/competition law? Let's take a look at yesterday's Government property auction, as reported in The Standard:

Tuesday's auction also saw Manhattan Garments, controlled by Liberal Party chairman James Tien Pei-chun, outbid K Wah International (0173), Chinachem and four unidentified bidders to secure the other lot on Tsing Lung Road in Tuen Mun for HK$960 million - the high end of market estimates of HK$800 million to HK$1 billion. The sale price was 64 percent above the HK$585 million opening bid.

Manhattan Garments general manager Patrick Chow Kwok-choi said the company would be the sole developer and may commit about HK$1.5 billion to develop townhouses. Manhattan chairman James Tien said 60 to 70 townhouses ranging from 2,000 to 3,000 sq ft each will be built on the site. He estimated construction costs at between HK$2,000 and HK$2,500 psf.

The legislator expects the townhouses to sell for about HK$10,000 psf, representing a potential profit margin of more than 40 percent.

Now I agree they are taking on a good degree of risk and these estimates may not pan out. But at a 40% profit margin, that's a pretty good return on risk. The more interesting question is how does the cartel decide who gets what?

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