1 Hotel development given priority on land sales list - Lower prices to encourage developers to think tourism
Olga Wong and Yvonne Liu, SCMP, Mar 01, 2008
Hotel sites will be offered at lower trigger prices than commercial sites in the government's new land application list as a means of encouraging hotel development, the government said yesterday.
The government's new land-sales list announced yesterday contains 62 sites, of which 10 are for hotel developments.
The Secretary for Development, Carrie Lam Cheung Yuet-ngor, said the land-sale system had not encouraged hotel development in the past because commercial sites were usually bought for office blocks, which gave developers bigger profits.
Under the new system, sites designated for hotels will be assessed against the open market value of hotel development, which is usually lower than the value of commercial sites, according to surveyors.
Mrs Lam said the hotel sites were in North Point, Wan Chai, Central, Hung Hom, Kowloon Bay, Kwun Tong, Tsuen Wan, Sai Kung and Tin Shui Wai. A site in Oil Street, North Point, with a gross floor area of 755,600sq ft, was expected to sell for up to HK$3.8 billion.
Mrs Lam said the sites were tailor-made for hotels catering to various types of visitors and would meet the city's need for holiday and business accommodation.
"The site in Sai Kung is so attractive that it can be turned into a luxury hotel," she said.
She said the new land sale system should not be seen as funding the tourism sector, as it was simply removing the "disincentive" for hotel development.
Developers will not be allowed to change the land use of hotel sites even if they were willing to pay a higher land premium, she said. Under the present application list system, a developer can trigger an auction by making a bid that is at least 80 per cent of a site's reserve price.
Among the 62 sites in the list, 42 are designated for residential development, and 10 each for hotel and commercial development.
The hotels will provide between 9,000 and 11,000 additional hotel rooms.
One of the blue-chip commercial-use sites on the list is the bus terminal next to Shun Tak (SEHK: 0242, announcements, news) Centre in Sheung Wan and is expected to sell for HK$12,000 per sq ft.
Charles Chan Chiu-kwok, managing director of Savills Valuation and Professional Services, said the hotel site on the former North Point Estate was the most attractive on the list and could fetch HK$1.59 billion, or HK$6,000 per sq ft.
He added that the price gap between urban areas and the New Territories would widen as the government had not increased the supply of residential sites in urban areas in the new list.
Derek Chung Siu-kuen, associate director of sales and marketing of Sino Land, welcomed the composition of the list, saying it provided a greater number of sites with diverse land uses.
Cheung Kong (Holdings) (SEHK: 0001) executive director Justin Chiu Kwok-hung was satisfied with the list but urged the government to make more luxury residential sites available as demand was strong.
Henderson Land (SEHK: 0012) chairman Lee Shau-kee said he was not interested in triggering sites in the new list, saying he owns abundant agricultural land in the New Territories and there were also many sites for sale on the mainland.
Environmental group Green Sense urged the government to remove a hotel site in Tsuen Wan from the list because it was already surrounded by "wall" buildings.
The MTR Corporation (SEHK: 0066) said yesterday it would launch tenders for three railway properties this year, including one at Che Kung Station and two at Tsuen Wan Station.
2 HK$860 million facelift planned for run-down 1950s blocks in Ma Tau Kok
May Chan, SCMP, Mar 01, 2008
The Urban Renewal Authority has started two redevelopment projects in Ma Tau Kok, Kowloon, which will cost HK$860 million.
The two projects involve 10 blocks of flats and commercial buildings built in the 1950s.
About 450 residents from 175 households are affected. Of the households, 121 of them own their flats.
The two project sites are located at the junction of Chi Kiang Street and Ha Heung Road, and the junction of Pak Tai Street and Mok Cheong Street.
The redevelopment projects are expected to be completed by 2014, yielding 210 flats and 27,600 sq ft of commercial area. In both projects, buildings will be set back for a street greening effect, which will allow a better pedestrian flow.
Iris Tam Siu-ying, the authority's executive director of planning and development, said the two sites were selected because of the deteriorating condition of the buildings.
"The buildings were built in the 1950s," Ms Tam said. "Their condition is such that rehabilitation is not desirable.
"There are more buildings of this age at other sites, but we can only do one at a time."
The redevelopment projects have been welcomed by flat owners, but met with a mixed reception from residential and commercial tenants.
Chan Sum Oi-kum, 77, lives alone in a fourth-floor flat of more than 1,000 sq ft.
Her husband bought the flat more than 30 years ago for HK$1 million, but had moved to a home for the elderly. Their children had married and moved out.
Mrs Chan, who is retired, lives on a monthly Comprehensive Social Security Allowance of HK$2,000.
"If the government wants to take this building, let it go ahead. I would just be happy to move into a 400 sq ft flat with an escalator," Mrs Chan said. "My bad leg can't bear the stairs anymore.
"One time when I was cooking in the kitchen, large blocks of cement fell from the ceiling. Since then I have no longer dared to cook."
"But what can I do? I can't even afford to eat properly, let alone fix my flat."
According to the authority, Mrs Chan may be able to get millions of dollars in compensation, calculated on the basis of the building's market value and the average price of the seven-year-old residential buildings in the same district.
Lee Bun, who rents a room in a shared flat, said the drainage system was leaking.
"My room smells. A kitchen and bathroom are in my room and they use the same pipe under the floor," said the 81-year-old, who pays HK$1,400 a month for the room.
"I would like to move to a public housing estate. It would be cleaner and nicer."
But a tailor surnamed Ho in his late 50s said he was uncertain about the future if his shop had to relocate. He has rented the same premises for more than 30 years. He pays HK$8,000 a month for the 160 sq ft shop.
"This is the very first shop I have run, right after completing my training. Most of my customers live in the district," said Mr Ho, who preferred not to disclose his full name.
"I can't think of where I should move to keep the customers."
According to the authority, affected residential and commercial tenants will receive cash compensation equivalent to three months' rent. Tenants of flats may alternatively choose not to receive a payment and to move to public housing if they are eligible.
3 Jockey Club baulks at fully funding MTR station
Fox Yi Hu, SCMP, Mar 01, 2008
Talks between the Jockey Club and the MTR Corporation (SEHK: 0066) about a railway station at Happy Valley are still alive, although the club says it will not fund 100 per cent of the project.
Jockey Club chairman John Chan Cho-chak said yesterday that it would be impossible for the club to shoulder the entire cost of building a station.
"The club is a not-for-profit organisation and if a racecourse MTR station was built, it would not be the sole user," Mr Chan said while at the University of Science and Technology. "So it would be impossible for the club to provide 100 per cent funding for a project of a listed company" such as the MTR Corp.
In January, the club issued a statement saying it should not have to subsidise the start-up costs of a railway line that would create long-term profits for the shareholders of a listed company but diminished the club's ability to make donations to the community.
Start-up costs for a racecourse station are estimated to be HK$1.3 billion.
An MTR Corp spokeswoman said yesterday that negotiations were continuing with the Jockey Club on whether to set up a station.
Secretary for Transport and Housing Eva Cheng said in December that the club should shoulder construction costs if it wanted a station near its racecourse.
Ms Cheng said the government had decided against such a station because of public opinion, technical obstacles and the time the rail extension would add to a subway journey between South Horizons and Admiralty under current plans.
Mr Chan, who is also a senior executive director of Kowloon Motor Bus, yesterday dismissed suggestions that his part in the racecourse station talks involved a conflict of interest - there are concerns that a station might cut into the volume of Happy Valley bus passengers.
"KMB mostly serves Kowloon and the New Territories, so there is no conflict of interest," Mr Chan insisted.
4 Expert questions bridge's benefits
Ng Kang-chung and Paggie Leung, SCMP, Mar 01, 2008
A mainland expert yesterday raised doubts over the economic benefits of the planned Hong Kong - Zhuhai - Macau bridge, a day after the three sides struck a deal over the financing.
His remarks coincided with calls by some Hong Kong truck drivers to allow drivers of all vehicles without mainland driving licences to use the facility, or else the bridge could end up becoming a white elephant.
An agreement was reached on Thursday among the governments of Hong Kong, Guangdong and Macau on the financing arrangements for the bridge.
The construction costs will be shared among the three sides, based on the estimated economic benefits brought to each area. Hong Kong will shoulder 50.2 per cent of the costs, Guangdong 35.1 per cent and Macau 14.7 per cent.
Estimates of the cost have not been disclosed, for fear of affecting the tender process, but some reports have said the bridge would cost about US$3.8 billion to build.
However, Zheng Tianxiang, an expert in infrastructure studies at the Sun Yat-sen University in Guangzhou, said the project had been delayed for too long and now served social and political purposes more than economic ones.
Citing the Western Corridor, the expressway opened last July linking Hong Kong and Shekou, Professor Zheng said: "The expressway and the new bridge could handle over 200,000 vehicles a day.
"But in Hong Kong, there are only about 50,000 cross-border lorries that can use the bridge [because the drivers also have Chinese driving licences]. It is far, far below the capacity of 200,000."
According to Hong Kong customs figures, there was a 2.1 per cent growth in cross-border land traffic from 15.2 million vehicles in 2006 to 15.52 million last year. Lok Ma Chau checkpoint was the busiest, handling 11.31 million vehicles last year.
The Western Corridor has been underused. According to the Transport Department, between July and December last year, the daily flow of traffic was 3,164 vehicles but its capacity was 58,000 a day.
Professor Zheng said on a TVB (SEHK: 0511) news report yesterday that the existing land crossings should be able to cope with future demand because many factories were moving away from Guangdong to cut costs.
"I would say the construction of the bridge is to serve a social and political purpose. The bridge draws [Hong Kong and Guangdong] closer," he said.
5 Detailed planning parameters to be set out for each site
Olga Wong, SCMP, Mar 01, 2008
Land auctions will no longer be threatened by judicial reviews because detailed planning parameters will be set out for every site, the development chief said yesterday.
There will be limits on building height, gross floor area and the ratio of the building's size to a site's area. The parts of a site which must not be built on and the width of visual corridors will also be prescribed.
The measures are intended to stop developments creating a "wall effect" that blocks sunlight and air circulation.
"The uncertainties for developers will be minimised," said Secretary for Development Carrie Lam Cheng Yuet-ngor.
In addition, a ventilation study must be conducted on sites two hectares or larger and those where buildings with gross floor area of 10,000 square metres or more will be built. Ten of the 62 sites on the list - in Sheung Wan, North Point, Hung Hom, Tsuen Wan and Tai Po - fall into these categories.
"The studies will be conducted by the government before the sites are auctioned," she said, since it would be unfair to developers if they were done afterwards. Such studies could result in a reduction in potential development density, she said.
The plot ratio of a residential site on the Hung Hom waterfront had been halved, the building height limit reduced by a sixth and other restrictions imposed following a ventilation study.
In Yuen Long, buildings may only cover 40 per cent of the site, may not exceed five storeys and must have a gross floor area of no more than 6,076 square metres.
6 Concern at Lantau storage yards
SCMP, Mar 01, 2008
Some Town Planning Board members fear more illegal storage yards will spring up on Lantau Island after the Hong Kong - Macau - Zhuhai bridge is built. Their comments follow the Planning Department's proposal to provide another 14 sites for container storage in the New Territories in the hope this will force operators to move their illegal business to legal sites.
