News Stories:

Click-on these handy "jump links" to quickly access the news item
you're looking for.

1. LCQ10: Land Supply

2. Consultation on proposals to facilitate private redevelopment

1. LCQ10: Land Supply
Hong Kong Government, 8 March 2006

Following is a question by the Hon Lee Wing-tat and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council today (March 8):

Question:

During the five consecutive months from September 2005 to January this year, no real estate developer applied for triggering of land in the Application List for the Sale of Government Land (the Application List) for auction or tender. Besides, it has been reported that the negotiations between Kowloon-Canton Railway Corporation and the Lands Department (LD) on the premium for lease modifications are progressing slowly, hence delaying the timetable for tendering a number of property development projects along railway alignments. In this connection, will the Government inform this Council:

(a) whether it has assessed if the supply of land and private residential flats will fall short of demand in the coming few years due to the above circumstances;

(b) of the measures to improve the Application List system, and whether it will consider disclosing the reserved prices of sites in the Application List or the basis for determining such prices, so as to enhance the transparency of the system;

(c) of the measures to expedite the negotiations on lease modification premium between the LD and the two railway corporations as well as the Urban Renewal Authority; and

(d) whether it will consider resuming the sale of land by auction on a regular basis?

Reply:

Madam President,

     My reply to the four-part question is as follows:

(a) The Application List system is market-oriented and the Government's role is to supply adequate land to meet market demand.

     On the supply of land, there are 32 sites on the Application List, covering a total area of about 24.2 hectares. In addition, developers can acquire land for residential development through other channels. For example, they can purchase land in the open market, acquire and assemble existing property for redevelopment, modify the land lease for the land they hold for relevant development, and participate in property development projects undertaken by the two railway corporations and the Urban Renewal Authority (URA). In the current financial year, apart from the major case of land exchange and lease modification approved, URA, MTR Corporation Limited (MTRCL) and Kowloon-Canton Railway Corporation (KCRC) have invited developers to submit letters of intent in response to the tendering of six projects, some of which have had their tenders invited already. In addition, according to the latest information, there are some 55 000 flats unsold or under construction in the market. Therefore, we believe that there will be adequate supply of land and private residential flats in the coming few years.

(b) We introduced improvement measures for the Application List system twice last year to enhance its smooth operation, with a view to facilitating the healthy and stable development of property market. Measures introduced in March and June 2005 have greatly streamlined the relevant procedures, reduced the risks and costs of triggering land, and relaxed the requirements for triggering land as well.

     Upon receipt of an application for triggering a sale site, the Lands Department will determine the reserve price according to the open market value in the light of the prevailing market conditions. As no prior assessment will be made, it is not possible to set out the reserve prices of various sites in the Application List. The reserve prices are determined in accordance with recognised professional land valuation principles which are accepted and well known to the surveying profession and developers.

(c) The tendering exercises of the property development of the two railway corporations are progressing well in general. Ad hoc problems or delays are mainly caused by factors other than the agreement on premium (such as objection raised by the community, objection to gazetting of roads and requests for re-designing). These factors will be considered carefully and handled properly. We will continue to monitor and co-ordinate the property development of the two railway corporations. Regarding the URA, as the Government grants land to it for redevelopment purpose at nominal premium, there is no question about premium negotiation.

(d) The Government decided that, with effect from January 2004, Government land would be provided through the Application List system. This position remains unchanged. At present, the Government has no plan to resume scheduled land auctions. There are suggestions that scheduled auctions of a limited scale for commercial/business sites should be introduced. We may consider this suggestion.

2. Consultation on proposals to facilitate private redevelopment
Hong Kong Government, 8 March 2006

 The Government today (March 8) commenced a consultation on proposals to lower the compulsory sale threshold for three specified classes of lots under the Land (Compulsory Sale for Redevelopment) Ordinance with the aim of facilitating private redevelopment.

"The Government attaches great importance to facilitating private redevelopment efforts as part of its initiative to address the problem of building deterioration," a spokesman for the Housing, Planning and Lands Bureau said.

"The current proposals seek to further facilitate the land assembly process for private redevelopment," the spokesman said. The ordinance stipulates that the Chief Executive in Council may specify by notice in the Gazette certain classes of lots for which a compulsory sale threshold of not less than 80% will apply. The Gazette notice is subsidiary legislation.

The Government is proposing to specify the following three classes of lots to be subject to a threshold of not less than 80% when applying to the Lands Tribunal for a compulsory sale under the LCSRO:

(i) a lot with "all units but one" acquired;
(ii) a lot with building(s) aged 40 years or above; and
(iii) a lot with missing/untraceable owners (with the number of missing/untraceable owners accounting for at least 10% of undivided shares of the lot).

"In drawing up the proposals, we have sought to maintain a careful and delicate balance between facilitating private redevelopment efforts and protecting individual property rights," the spokesman said.

Coming into operation in 1999, the ordinance provides that other than as a mortgagee, any person who owns at least 90% of undivided shares in a lot may apply to the Lands Tribunal for a compulsory sale of the entire lot for the purpose of redevelopment. The Lands Tribunal will hear the objections of the minority owners over the valuation of properties and consider, among other things, if redevelopment of the lot is justified having regard to the age or state of repair of the existing development and whether the majority owner has taken reasonable steps to acquire all the undivided shares in the lot before making an order for sale.
 
The Government is now seeking the views of the relevant professional bodies and the industry on the practicability of the three proposed classes of lots. Views of the community on the proposals will also be collected through various channels, including public forums, group discussions with property owners and the Government's Public Affairs Forum on the Internet.
 
Subject to community consensus over the proposed classes of lots, the Government plans to take forward the legislative exercise in the 2006/07 legislative session.

Copies of the proposals can be viewed and downloaded from the Housing, Planning and Lands Bureau website (www.hplb.gov.hk).

People are welcome to submit their views before the end of May, 2006, by fax (2845 3489), by e-mail (lcsro@hplb.gov.hk) or by post (Urban Renewal Unit, Housing, Planning and Lands Bureau, 9/F Murray Building, Garden Road, Hong Kong).

Ends/Wednesday, March 8, 2006