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URA earmarks $1.6b for 5 jobs 2.
HK Land may seek ruling 3.
Surveyor says plan does not maximise $16b asset 4.
Plan has room for more legislators 5.
Office market remains soft despite Tamar
1. URA earmarks $1.6b for 5 jobs The
Urban Renewal Authority (URA) plans to spend HK$1.6 billion on five redevelopment
projects over the next 12 months. This will bring the total number of authority
projects to 11. URA non-executive director Lau Ping-cheung said the authority
might require financial assistance from the government, the Housing Authority
and the Housing Society to help finance the new schemes. He said the HK$1.6-billion
price tag was based on the value of the existing properties. It would be spent
on compensating home owners, but no details were given on the cost of redeveloping
the sites. The five latest projects will affect 600 residents of 200 properties
on First and Second streets and Wing Lee Street in Sheung Wan; Staunton Street
in Central; Po On and Shun Ning roads in Sham Shui Po; and Nga Tsin Wai Road in
Wong Tai Sin. "We don't have a timetable yet [for buying the properties],
but it would be sometime between now and March next year," Lau said. He refused
to elaborate on the plans, including the number of apartments to be built. Sham
Shui Po residents living in the area slated for redevelopment said rumours of
the project first surfaced six years ago. But the plan was put on hold after the
URA decided to push ahead with other projects. Residents said due to the delay,
most of the Sham Shui Po buildings now needed urgent maintenance work. "What's
the point of carrying out the work when the buildings are to be torn down anyway?"
one resident asked. Since replacing the Land Development Corporation in May last
year, the URA has been criticised for its slow progress on urban redevelopment
projects. In defence, the authority has blamed home owners for haggling over compensation
despite being offered "generous" packages. The authority offered approximately
HK$4,290 per square foot for properties in Wan Chai and HK$3,200 in Sham Shui
Po. Those figures are more than 5 per cent above the current market rate. Residents
forced to give up their flats are expected to have enough to buy a replacement
apartment of comparable size of less than seven years old. But, some residents
feel the amount of compensation is still too low. They point out that many had
bought their flats at peak levels before the property market slumped. [Source:
Hong Kong iMail, 2 May 2002] 2.
HK Land may seek ruling
Hongkong Land may be another developer to use the Land (Compulsory Sale for Redevelopment)
Ordinance to unify the ownership of an old residential development in Tai Hang.
Hongkong Land residential property executive director Robert Wong Yau-chung said
the group would apply under the ordinance to acquire the remaining land titles
of Lai Sing Court once the height restriction for the site was resolved. The site
was justified for a maximum plot ratio of five times under the latest proposed
outline zoning plan. However, the building height restriction would mean a reduction
of the plot ratio to 2.7 times. "The redevelopment will not be financially
viable if the plot ratio is too low," he said. He said that before the latest
zoning plan, Hongkong Land had an initial estimation for the redevelopment of
US$200 million, with the possible highest plot ratio of about eight times. The
change of the planning rules for the site, which covers 61,600 square feet, could
substantially affect the land value. "The scheme will still go ahead if a
five times plot ratio is achieved," Mr Wong said. He said the group would
proceed with acquisition through the Lands Tribunal as a final resort to resolve
the dispute over the value of the remaining minority interest. He said the land
resumption ordinance was too restrictive for redevelopment. Singapore enabled
land resumption by law if developers had acquired 80 per cent of the land titles.
He said developers in Hong Kong could not apply for an order for sale from the
courts unless at least 90 per cent of the land titles for all lots to be redeveloped
had been acquired. [Source:
SCMP, 1 May 2002] 3.
Surveyor says plan does not maximise $16b asset
Estimates of the value of the Tamar site range up to $16 billion - and a leading
surveyor has warned that the Government's plans do not make the most of such a
precious resource. Property industry players - and legislators - generally supported
the decision to shift Government and Legco headquarters to the site, but CS Surveyors
director Cheng Wing-ming warned the Government to make the most of the space.
"It will be a waste of land resources if the Government does not fully utilise
the plot ratio of the site," he said. "The excess office space can be
used to accommodate other government or related departments." He estimated
the site could be worth $14 billion to $16 billion, at a price of $3,500 to $4,000
per square foot. The site, if sold for private commercial development, could yield
a total floor area of more than four million sq feet. This compared with about
1.8 million sq feet under the Government scheme. Most developers and surveyors
said the move was justified in view of the slow economy and weak office market
conditions and because the Government had a genuine need for new offices. Surveyor
Pang Shiu-kee said that maximising the floor space for the site would result in
a "very bulky" complex. He estimated the site had a commercial value
of just above $10 billion, based on a price of $2,500 per sq foot. Legislators
warned that their new headquarters should not be too extravagant. Welcoming the
move, planning sector legislator Lau Ping-cheung said a lavish design would be
unacceptable. "It should be pleasant, but not lavish. Apart from being functional,
it should also represent Hong Kong and demonstrate its values," he said.
Describing the re-location as a move to prop up the ailing property market, Lee
Cheuk-yan of The Frontier said the new complex should be open and friendly to
the public. Mr Lee, who lodged an appeal yesterday against police disallowing
him to stage a Labour Day protest outside the Central Government Office today,
said the new headquarters should have an open area for demonstrations. But Chan
Kam-lam of the Democratic Alliance for the Betterment of Hong Kong called for
a not-so-traditional design to demonstrate the Government's aspiration to keep
abreast of the times. Fred Li Wah-ming said he hoped the new complex would be
multi-purpose. "It is going to be the landmark of Hong Kong. It should provide
solutions to the shortage of leisure area in Central and serve as the central
plaza for visitors," he said. Independent member Ng Leung-sing said the new
office should be dignified but modest and functional. [Source:
SCMP, 1 May 2002] 4.
Plan has room for more legislators
The new Legco building will have enough space to deal with possible political
reforms that might take the number of legislators beyond the current 60. After
being briefed by officials on the plan for the new building at the Tamar site,
Legco president Rita Fan Hsu Lai-tai yesterday said enough space for extra seats
would be available. The Basic Law provides for universal suffrage for the legislature
from 2007 - but leaves open the number of seats. Mrs Fan said the new building
would offer more flexibility - but "our assumption at present is there will
be only 60 members". She also welcomed the Government's move to complete
the building by 2007. The new premises, Mrs Fan said, would be separate from the
new Government headquarters but within walking distance. Director of Administration
Andrew Wong Ho-yuen confirmed the new Legco building would be big enough to accommodate
rises in the number of legislators and secretariat staff. Legislators yesterday
supported reserving space in case of future political development. Mrs Fan said
members would later discuss with officials whether there would be a designated
area for protesters. "The Basic Law states that the public have freedom of
expressing views," she added. Fred Li Wah-ming, Democrat legislator and Legco
House Committee vice-chairman, said the new Legco building should not be too close
to the Government headquarters. "Parliaments and the executive authorities
in other countries are separated to show their roles," he said. [Source:
SCMP, 1 May 2002] 5.
Office market remains soft despite Tamar
The construction of new government headquarters on the Tamar site will not immediately
boost the office market, according to developers and surveyors citing continuing
concern over the economy. They said the decision removed uncertainty over the
site, which if sold for commercial development could have provided a floor area
of about four million square feet. The supply of offices would remain abundant
in the medium term and any pick-up in demand depended largely on economic recovery.
Pang Shiu-kee, managing director of SK Pang Surveyors, said office rents had softened
further in the past year and it would probably take another year for the market
to consolidate. Even with Tamar off the for-sale list, new projects in Central
such as Chater House and Two International Finance Centre would be available.
Mr Pang said there would be no shortage in the supply of office land in the longer
term, saying the Central Market site could be on sale soon. The Murray Building
and the Central Government Offices, when vacated after the relocation to Tamar,
could also be used commercially. Adrian Lee, assistant director of Great Eagle
Holdings, said it made sense for the Government to consolidate its departments
into a single modern office complex as most of the Government's offices in Central
were outdated. But he said the decision would not significantly affect the office
market as actual supply would not have changed. Government statistics show supply
will outstrip take-up until 2010. The stock of grade A offices in prime locations
was estimated at 48 million sq ft, against a take-up of 44 million sq ft. By 2005,
supply is expected to rise to 55 million sq ft, against a take-up of 51 million
sq ft. By 2010, supply is forecast to reach 64 million sq ft, compared with a
take-up of 59 million sq ft. Major projects scheduled for the next few years include
the Furama Hotel redevelopment in Central, Swire Properties' Pacific Forum in
Wan Chai and Sun Hung Kai Properties' office development in Kowloon Station. Knight
Frank director of valuation Anthony Lau Chun-kuen said it would be difficult to
find a buyer and secure a good price for the Tamar site if it were put on sale
today. He said the Government's decision on Tamar would reduce the potential supply
of office land in the short term, although the pace of take-up would still hinge
on the economy. According to Jones Lang LaSalle, office rental decline continued
in the first quarter of this year. Net effective rents fell 7 per cent in Central,
4.5 per cent in Wan Chai and Causeway Bay, and 1.5 per cent in Tsim Sha Tsui.
The consultant said vacancy rates were relatively stable, with Central at 7.9
per cent, Wan Chai and Causeway Bay at 4.7 per cent, Hong Kong East at 6 per cent
and Tsim Sha Tsui at 8.7 per cent. [Source:
SCMP, 2 May 2002] |  |
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