HONG KONG (REUTERS) - Sun Hung Kai Properties Ltd , Asia's largest property developer by market value, is to buy a residential and commercial site in Hong Kong for HK$9.32 billion (S$1.66 billion), MTR Corp Ltd, the transportation company selling the land, said on Thursday.

A division of Sun Hung Kai Properties outbid five other Hong Kong developers, including Cheung Kong Property Holdings Ltd and New World Development Company Ltd. The deal means Sun Hung Kai will be able to build residential and commercial buildings on the 39,100 square metre site in the Yuen Long area of Hong Kong's New Territories district.

The price tag on the sale was more than 25 percent higher than market estimates, according to real estate company Centaline Property Agency.

This type of land sale is considered a barometer of developers' long-term confidence in the housing market. Such sales are part of the government's plan to tackle a housing shortage and rising home prices, which have risen more than 170 per cent since 2008, making Hong Kong one of the world's most expensive property markets.