"Sino Land is falling because people are fearing that there may be a cash call," said Peter Lai, director at DBS Vickers.
"But in the medium-term to long-term, the auction result is beneficial to the whole property sector," he said, adding the solid outcome reflected a strong economy.
The benchmark Hang Seng index edged 21.13 points lower to 14,090.52, retreating from a fresh 7-week high of 14,118.23 struck early in the session, while the property sub-index lost 0.52 percent to 17,268.53.
Market turnover at HK $16.5 billion was ahead of Monday's HK $14.1 billion, but still below the average of HK $20 billion seen late last year.
Market activity was also dampened by a public holiday in the United States on Monday and as investors awaited key earnings results, particularly from market heavyweight HSBC due on Monday.
"It's subdued. The overall theme is waiting for results," said Alfred Chan, chief dealer at Cheer Pearl Investment.
HSBC Holdings, which accounts for a third of the Hang Seng index, closed unchanged at HK $133. Its subsidiary Hang Seng Bank Ltd advanced 0.47 percent to HK $107.
Global fashion retailer Esprit Holdings Ltd, expected to post a robust 43 percent jump in first-half profit on Wednesday, slipped 0.85 percent to HK $46.60 after gaining 2.17 percent in the last two sessions.
Among other property stocks, Hong Kong's largest property firm Sun Hung Kai Properties shed 0.68 percent to HK $72.75, while the city's third largest developer Henderson Land Development Co Ltd lost 1.09 percent to HK $36.40.
Elsewhere, shares in Moulin International Holdings Ltd fell 7.81 percent to HK $5.90 after the world's third-largest maker of eyewear announced it had raised US $81.3 million through a sale of shares and convertible bonds.
By contrast, China Gas Holdings Ltd gained 4.64 percent to HK $1.58 on news that India's largest gas transporter GAIL (India) Ltd will take a 9 percent stake in the Chinese city-gas distributor.