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1. Airport Authority plans second hotel

2. Update for heritage law

3. LCQ7: Reclamation Projects

4. Hang Lung Properties profit rises despite refusing to sell out

5. United front over harbour

6. Legco at Tamar site is 'value for money'

7. Why is it taking so long to decide how to save HK's precious heritage?

8. Others use carrots and sticks to conserve buildings

9. Harbour design project to forge sustainable plan

10. Hang Lung back to buy land after four-year break

1. Airport Authority plans second hotel
Keith Wallis, The Standard 19 February 2004

The Airport Authority is going ahead with plans for a second hotel at Chek Lap Kok airport that would compete with the existing five-star 1,100-bed Regal Hotel complex.

Justifying the move, AA spokeswoman Connie Hon said the new development would be needed to meet demand caused by the expansion of commercial facilities at the airport.

``The development of the second airport hotel is demand driven,'' Hon told The Standard.

The creation of the international exhibition centre (now called AsiaWorld-Expo), golf course and the SkyPlaza commercial and retail complex will mean an increasing number of people will stay overnight at the airport.

``It is anticipated that with the completion of these major projects, Hong Kong International Airport will attract new streams of business travellers, overseas exhibitors and visiting delegates,'' she said.

Hon added there would be demand for hotel rooms for people visiting tourist attractions on Lantau and Disneyland.

``The current and new hotel facilities will be able to capitalise on this market expansion,'' Hon said.

But while the expo centre, SkyPlaza and Disneyland are due to be completed by late 2005 or early 2006, it is unlikely the new hotel could be finished and open to the public until at least 2007.

Hon was commenting after the Airport Authority asked developers and investors to submit expressions of interest for the hotel by April 26.

The authority has left it to developers to propose the number of rooms, ancillary facilities and level of luxury at the complex.

The only stipulation given by the airport body is that the facility will cover 25,000 square metres. The hotel will have a ``waterfront vista adjacent to the SkyPier'' and be directly connected to the exhibition centre.

Hon said the Airport Authority hoped to award the tender to develop the hotel ``in the second half of 2004''. Construction would start in 2005.

2. Update for heritage law
Matthew Lee, The Standard 19 February 2004

Rapid urbanisation has led the government to consult the public on how to revamp the territory's heritage protection law.

``The system, as it is, protects old bricks, rather than historical and cultural value,'' Secretary for Home Affairs Patrick Ho said yesterday.

Ho was speaking after launching a three-month consultation exercise regarding the existing Antiquities and Monuments Ordinance that has been in operation for almost 30 years.

The consultation document claims the existing ordinance is rather rigid in that it only provides for one form of conservation, to declare buildings as monuments, which proves unattractive to many owners.

The owners are unwilling to allow their premises to be declared as monuments because of the restrictions on use and alteration that would then be imposed under the ordinance.

Ho suggested that the owners of heritage buildings might want to renovate their properties and turn them into business assets.

``Heritage buildings converted into restaurants, for example, might attract a lot of people,'' he said.

``So if we figure out how to protect the heritage buildings and what to protect, the property owners [might be even willing] to pay the government [instead of asking for compensation],'' Ho added.

He said a clear policy is needed to set out how to select heritage items for conservation, also to formulate a holistic and systematic approach to pick out and protect buildings of historical merit.

``Hong Kong has undergone urbanisation at an unprecedented rate. This has rendered conservation work on built heritage particularly difficult.

``It is time to take a critical look at our past work and to consider future directions,'' Ho said.

There are currently 78 declared monuments on the territory, of which 60 are buildings and 18 are rock carvings, forts and archaeological sites.

A Home Affairs Bureau spokeswoman said that while the current law was rigid in terms of regulation in reconstruction, making it unattractive for property owners, the government still had the power to declare a building a monument without the owner's consent. ``The government has the authority to declare a property as a proposed or permanent monument with the consensus of the Antiquities Advisory Board and the Chief Executive-in-Council, even without the agreement of the property owner.''

``But negotiation is always preferred.''

The spokeswoman said there was no absolute definition for monument declaration, but there is a grading system for historical properties to be applied by the Antiquities and Monuments Office after the properties are declared monuments, defining the kinds of conservation to be applied.

``Preparation of the review started more than a year ago. The government wanted to know how the public's social and cultural perspective has changed recently, and to make amendments accordingly,'' the spokeswoman said.

She added that financial compensation is not a necessity as some property owners may want to donate the buildings, such as the Lui Seng Chun Building in Mong Kok, one of the few remaining tong lau, or Chinese tenement buildings, that was turned over to the government by the family of the late Lui Leung, one of the founders of Kowloon Motor Bus.

Incentives the government might provide for owners included financial grants, loans, planning control, penalties, tax credits and transfer of development rights of conservation building to other sites.

A Leisure and Cultural Services Department spokeswoman said age, architectural merits and historical background of the historic buildings would be considered as criteria for declaration during the assessment.

``Hong Kong needs a proper heritage protection policy,'' said Wong Wah-sang, associate professor of architecture at Hong Kong University, and chairman of Urban Watch, a non-profit organisation set up to observe and care for the city's urban environment.

``Conserving our heritage does not only give cultural and tourism value. It also helps educate young people and helps them understand our history.''

3. LCQ7: Reclamation Projects
Hong Kong Government, 18 February 2004

Following is a question by the Hon Miriam Lau and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council today (February 18):

Question:

In the light of the judgment delivered by the Court of Final Appeal on January 9 this year regarding the Wan Chai North Reclamation Scheme, would the Government inform this Council whether:

(a) it will shelve the various reclamation projects under planning; if so, of the details of such projects; and

(b) it will revise the South East Kowloon Development project and the reprovisioning arrangements for Kwun Tong Public Cargo Working Area and the typhoon shelters in Southeast Kowloon; if so, of the details of such revisions; if not, the reasons for that?

Reply:

Madam President,

(a) The present Central Reclamation Phase III ("CRIII") and the proposed Wan Chai North and South East Kowloon reclamations are the only remaining reclamation projects in the Harbour. The judicial proceedings of the CRIII judicial review are still underway. We will continue to suspend the marine piling and reclamation works originally programmed to be carried out under the CRIII project until the legal proceedings have taken their course. As for Wan Chai, the Town Planning Board took the initiative in late October 2003 to request the Government to conduct a comprehensive review of the Wan Chai North reclamation. We will conduct such a review expeditiously in accordance with the law with a view to meeting essential needs for transport infrastructure. We will review the South East Kowloon reclamation in an equally vigilant and cautious manner to ensure that the project will meet the single test of "overriding public need" laid down by the Court of Final Appeal ("CFA"). Currently, the design work of the proposed reclamation works under the South East Kowloon Development ("SEKD") project has been suspended. This includes the reclamations at Kowloon Bay, Kai Tak Approach Channel and Kwun Tong Typhoon Shelter.

(b) As mentioned in (a) above, the Government will review the South East Kowloon reclamations in a vigilant and cautious manner to ensure that they will meet the single test of "overriding public need" laid down by the CFA. The review of the SEKD project takes time. During the process, we will conduct extensive public consultation. If needed, we will revise the relevant outline zoning plans. The Government will consider the reprovisioning arrangements for the Kwun Tong Public Cargo Working Area and the typhoon shelters in South East Kowloon on the basis of the review results.

4. Hang Lung Properties profit rises despite refusing to sell out
Eli Lau, The Standard 19 February 2004

Hang Lung Properties defied market expectations yesterday, reporting a 0.8 per cent rise in interim profit even though it has not released new residential projects in the past two years.

The blue-chip developer posted net profits of HK$526.9 million, or 18.2 HK cents per share, for the six months ended December 31, compared with the restated net profit of HK$522.8 million for the same period a year earlier.

Turnover surged to HK$1.12 billion during the period, from HK$1.07 billion a year ago. An interim dividend of 11 cents was declared.

Analysts had predicted a 5 per cent to 8.5 per cent drop in net profit. Parent Hang Lung Group reported a 6.7 per cent rise in net profit to HK$292 million from HK$273.6 million, thanks to a 10 per cent reduction in financing costs to HK$160.8 million.

Hang Lung Properties' better-than-expected performance was largely due to an 11 per cent increase in rental revenue to HK$1.08 billion.

``Rental contribution from the group's two Shanghai properties - Plaza 66 and The Grand Gateway - offset a decrease in Hong Kong property sales,'' group chairman Ronnie Chan said.

The company is banking on sales at its luxury high-rise Harbourside project, above the MTR's Kowloon Station, to boost second-half earnings.

Group executive director Terry Ng said yesterday 70 Harbourside units were sold this week via internal sale at prices ranging from HK$8,000 to HK$10,000 per square foot.

Another batch of 30 Harbourside flats will be rolled out for public sale tomorrow at an average price of HK$9,067 per square foot, he said. The units are on floor 56 or above.

``We expect to generate some HK$360 million if all 70 flats are sold,'' Ng said, adding that all income from the Harbourside project would be booked into the second-half accounts.

The Harbourside has 1,122 units with a total gross floor area of about 1.3 million square feet. Analysts estimate the project was built at a cost of about HK$4,000 per square foot.

Chan said yesterday Hang Lung Properties will sell about 5,000 flats in four new projects - Harbourside, the 188-unit Carmel-on-the-Hill project in Ho Man Tin, and the 1,616-unit Aqua Marine and 1,823-unit The Long Beach projects in West Kowloon - in the next three to four years.

``We aim to be one of the local developers with the highest profit margins,'' he said. Hang Lung Properties was interested in the new land application list but ``will stick to our own policy and will not just follow the market trend''.

Although luxury property prices have surged significantly in the past few months, Chan believes the mass market ``will not be affected''.

Separately, Hang Lung Properties said a total of HK$1.041 billion, or 30.18 per cent, in convertible bonds have been converted into equity since last month, an increase of 3.83 per cent of the issued share capital. Market capitalisation was boosted to HK$35.3 billion as of Tuesday.

Ng said Hang Lung Properties may seek a syndicated loan facility for refinancing purposes, but has no concrete plans yet. It is looking for low-interest loans with a five- to 10-year term.

Its shares closed down 1.71 per cent yesterday at HK$11.50.

5. United front over harbour
Dennis Ng, The Standard 19 February 2004

Conservationists from various sectors have banded together to draw up plans for the future development of Victoria Harbour.

Known as ``Designing Hong Kong Harbour District'', the group has put up HK$1.5 million to conduct surveys, organise seminars, consult professionals and leaders and hold public forums in an attempt to find a consensus on how the waterfront should be developed.

It is not immediately clear if the government will feel obliged to follow these proposals once they are completed.

``Following the publicity in the wake of court hearings against the government's harbour reclamation, the community is ready to offer educated input,'' said Paul Zimmerman, principal of the strategy consultancy The Experience Group, at the Fringe Club in Central.

Supporters of the initiative believe that sustainable solutions can only be arrived at by looking at the Victoria Harbour district as a whole.

Christine Loh, chairman of the Society for the Protection of the Harbour and founder of the think-tank Civic Exchange, said the initiative brought business, civic and public sectors together. ``We look forward to working together to create an open platform for building community consensus.''

Fears that the harbour was being narrowed into a river were highlighted last year when the Society for the Protection of the Harbour took the government to court over its Central reclamation project.

This was followed by a challenge to the government's Wan Chai reclamation. An appeal by the Town Board against a ruling stopping work there was thrown out by the Court of Final Appeal on January 9.

A bid to halt reclamation work at Central was heard by the Court of First Instance earlier this month and a judgment is expected within a couple of weeks.

Vincent Ng, convenor of civil concern group Hong Kong Urban Design Alliance, said city planning issues quite often end in disputes.

``That is why we have decided on this latest approach,'' he said. ``We would like the business community, the government, citizens and professionals working together to get a consensus, instead of one side making all the proposals that are opposed, thereby wasting time and the taxpayers' money.''

GML Consulting will carry out a survey in the first half of this year. Consultancy director Thomas Tang said it will solicit opinions and ideas from various associations such as business chambers through questionnaires.

GML will then interview leaders and decision-makers to get their feedback.

While he would not estimate the exact cost of the survey, Tang said it will be sponsored by various organisations including MF Jebsen and Swire Properties.

Zimmerman said the supporters will form an independent panel to write a report that will be presented to the government and other interested bodies.

6. Legco at Tamar site is 'value for money'
JIMMY CHEUNG, SCMP 19 February 2004

Constructing a new Legco building at the Tamar site was still the best way to solve the council's congestion problem, Legco president Rita Fan Hsu Lai-tai said yesterday.

Mrs Fan said the construction cost of $1.28 billion was not too high considering the government's expenditure between 2003 and 2008 had been put at $143 billion.

The Legco Commission yesterday reviewed the options available after the government deferred the construction of a new government headquarters and Legco complex at Tamar.

Speaking after the meeting, Mrs Fan said a new building was still the most economic option.

"Although the construction cost appears to be substantial, it is not a huge part of the government's capital expenditure," she said.

The government earlier proposed renovating the existing Legco building to expand the seating area for lawmakers, which would incur a one-off cost of $100 million and a recurrent annual cost of $57 million.

Another alternative is to rent more office space and hold meetings in the Convention and Exhibition Centre.

These two options are expected to cost more than $300 million during a full four-year term.

Mrs Fan said while it would not be a problem to convert the dining hall or even her own office to create more space, she was not sure if this would be possible as the Legco building was an historic monument with restrictions on works.

Lawmakers hope to raise the issue with Chief Secretary Donald Tsang Yam-kuen at a meeting of the Legco house committee next Friday.

A spokeswoman for Mr Tsang's office repeated that the Tamar project was deferred because of financial constraints.

She said the government had a duty to study any Legco proposals which might have major financial implications. But it was committed to establishing a civic core at Tamar to house the government headquarters and Legco.

7. Why is it taking so long to decide how to save HK's precious heritage?
KLAUDIA LEE, SCMP 19 February 2004

The government has been criticised for condemning precious remnants of Hong Kong's history to the wrecker's ball by failing to make concrete proposals in its long-awaited review of heritage conservation policy.

The consultation paper released yesterday makes no suggestions to address the most contentious issue in protecting heritage structures - how to deal with private ownership - but instead raises a number of broad questions. These include "what should we conserve", "how do we conserve our built heritage" and "who should pay".

However, such principles had already been discussed at length by the Culture and Heritage Commission, said former commission member Ada Wong Ying-kay. The release of the consultation paper comes after the commission, the government's former top policy adviser on cultural development, spent three years discussing such matters before making its final report last year. The commission has been disbanded.

Ms Wong said: "Why is there such a huge regression? Over the past few years, the Culture and Heritage Commission has already discussed the principles of heritage preservation. But now they do it from `zero' again."

She said the paper was "vague" and the government should propose concrete measures instead of rehashing discussions on broad principles.

Siu Kwok-kin, head of the Chinese Department of Zhuhai University and a member of the Antiquities Advisory Board, said he also felt "frustrated" by the consultation paper, saying that valuable buildings would continue to disappear because of the government's delay in coming up with firm policies.

Speaking at the release of the consultation paper, Secretary for Home Affairs Patrick Ho Chi-ping admitted that the existing Antiquities and Monuments Ordinance, enacted in 1976, had failed to keep up with the development of Hong Kong society and was in need of an overhaul.

He said the existing ordinance only provided for one form of conservation - declaring a single building a monument based on its historical significance and architectural merit. Dr Ho said he wanted feedback on whether laws should be changed to allow the preservation of whole streets or neighbourhoods to foster a sense of "collective memory".

He said the Tiger Balm Garden in Tai Hang and Hong Lok Street, known as Bird Street, in Mongkok were examples of what could not be preserved under the existing ordinance, despite their historical or cultural significance. The Tiger Balm Gardens were sold to be redeveloped in 1998, while Bird Street was cleared and its stallholders shifted to a new location in 1997.

There are 78 declared monuments in Hong Kong, 60 of them buildings.

The government had previously suggested addressing the thorny issue of private ownership of potential monuments by allowing the transfer of development rights. Under this, owners would be granted the development rights of other, less significant, sites in return for relinquishing such rights to a heritage zone. However, the consultation paper failed to mention this.

Dismissing the suggestion that the government was evading this issue, Dr Ho said the community had to agree on general principles before concrete measures could be drafted. "The foremost question is: should we preserve heritage?" he said.

He said that after the first stage of public consultation ended in mid-May, the government would start a second stage in which concrete proposals would be made.

8. Others use carrots and sticks to conserve buildings
KLAUDIA LEE, SCMP 19 February 2004

The government's heritage consultation paper refers to the experiences of London, New York, Singapore and Macau in preserving heritage sites.

It notes that these cities use a carrot-and-stick approach to get owners to co-operate with heritage conservation.

They use grants and loans to help owners maintain historic buildings, but penalise failure to properly maintain them.

They also exempt historic structures from some buildings regulations.

In London, buildings and structures of archaeological significance are preserved once they are identified. Permission is required for any alterations.

In New York, heritage sites are graded from one to four depending on their special character and historical and aesthetic value, with different rules for each category about what can be built, rebuilt, altered or demolished.

The United States government also has federal powers to designate National Historic Landmarks as a means of conserving heritage.

Singapore divides national monuments into two categories: buildings of outstanding merit must be preserved, but privately owned buildings may be altered as long as key cultural or historical features are preserved.

It also designates conservation areas, in which historic buildings may not be altered.

In Macau, the chief executive must approve all alterations to monuments. Buildings of architectural interest may not be demolished.

In Hong Kong, only declared monuments are protected by law.

Although the Antiquities Advisory Board grades buildings from one to three according to their heritage value, the gradings do not mandate protection. They are merely for the government's reference and have no provisions binding owners to conserve historic buildings or those with heritage value.

9. Harbour design project to forge sustainable plan
CARRIE CHAN, SCMP 19 February 2004

Christine Loh wants community views on harbour district design. Picture by Dickson Lee

A project designed to give individuals a say on the future look of Victoria Harbour and its surrounding districts was launched yesterday.

The initiative - Designing the Hong Kong Harbour District - invites individuals, businesses and policy makers, to help forge a consensus on sustainable planning of the "harbour district". Public forums and roundtable seminars on the issue will run from February to June.

The organisers include the Business Environment Council's Andrew Thompson, Civic Exchange's chief executive Christine Loh Kung-wai, GML Consulting's Thomas Tang and the Experience Group's Paul Zimmerman. The South China Morning Post is a media sponsor.

Data from the project will be compiled into a report to be handed to the government by June. The report will be overseen by an independent panel to ensure the outcome is not biased.

Ms Loh, who is also chairwoman of the Society for the Protection of the Harbour, invited the community to give views on the entire urban design of the harbour district issue rather than specific projects. "After going through rounds of court cases, the court laid down definitions of the Protection of the Harbour Ordinance," she said. "We think this is the right opportunity to look at the harbour district's development rather than just pieces of reclamation on the map."

She said the scheme promised to be a learning process for the government and the community. "It's not a tea party. Everyone will be briefed on the background and understand what constraints we need to go through," she said.

Mr Zimmerman, chief co-ordinator of the project, said the initiative could save legal bills - for the government and the harbour protection society - if it could help reach a consensus. He said he was confident the government would take note of the views in the report.

"The Planning Department has agreed to take an advisory role and would be actively involved in meetings."

Mr Zimmerman said ministers including Housing Planning and Lands chief Michael Suen Ming-yeung, environment secretary Sarah Liao Sau-tung and Chief Secretary Donald Tsang Yam-kuen might be invited to a conference to be held as part of the project on May 3.

For details, visit www.friendsoftheharbour.org/designHKHD.html

10. Hang Lung back to buy land after four-year break
ERNEST KONG, SCMP 19 February 2004

Developer Hang Lung Properties is ready to end a nearly four-year buying hiatus and begin restocking its land bank after being lured back by the recovering property market, according to chairman Ronnie Chan Chichung.

With no large purchases since 2000, Mr Chan said the company was interested in acquiring land in Hong Kong.

However, he said the firm would focus on larger plots that would provide better profit margins.

"Apart from our rental return, we want to maintain the highest profit margin among major developers in Hong Kong," Mr Chan said while announcing the firm's interim profit yesterday.

"Small pieces of land may provide high profit margins but we are not interested ... as the profit is just not enough."

Hang Lung's last big acquisition was the $2.58 billion purchase of a West Kowloon lot. The Long Beach, a 1,829-unit residential development, is being built on the site.

Hang Lung reported a 0.8 per cent increase in net profit to $526.9 million for the six months to December, compared with a restated $522.8 million for the same period the previous year.

A drop in the company's Hong Kong property sales was offset by a 95 per cent increase in rental income from its two Shanghai properties.

CLSA senior property analyst Keith Yeung said the restatement was due to a change in accounting policy and reflected a 4 per cent drop in interim earnings.

The increase in Shanghai rental income, which jumped from $117.4 million to $228.6 million, was due to an increase in the company's Grand Gateway stake from 47 per cent to 66 per cent.

Mr Chan said the market's recovery meant the company was ready to launch its flats inventory - about 4,700 units in four residential projects.

"The inventory could be sold over three to four years," Mr Chan said.

Hang Lung Properties will start selling 30 units at its long-awaited flagship, The HarbourSide in West Kowloon, tomorrow at about $9,000 per square foot. No timetable was given for the sale of the project's 1,122 units.

Parent company Hang Lung Group, a 62 per cent stakeholder in Hang Lung Properties, reported a 6.7 per cent net profit rise to $292.0 million from a restated $273.6 million in the previous half-year.

The interim dividend remained unchanged at 11 cents.