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1. K Wah triggers site for sale at Kowloon City

2. Sino Land seeks allies in projects

3. Developers aim to hit $30,000 psf mark for houses

4. $682m Kowloon site offer stirs market

5. Resumption of land in Wan Chai gazetted

6. Housing Department keeps frontline staff on alert against SARS

7. Lands Department to hold the second land auction this year

8. Housing Department Studies Public Housing Building Problems Report Findings

1. K Wah triggers site for sale at Kowloon City
Eli Lau, The sTandard 21 May 2004

K Wah Properties, which has already drawn two government plots for auction, has triggered another site for sale at Kowloon City.

The developer confirmed last night that it had triggered the site from the government's application list and would invest up to HK$1.5 billion on developing the residential project if it won the bidding. The 3,521 square metre plot at Sa Po Road can produce a minimum gross floor area of 19,014 square metres.

The Lands Department said the government has accepted the applicant's minimum guaranteed bid of HK$682.2 million and this would be the starting price for the sale.

The auction will be held on June 15, it said.

Executive director of Legend Surveyors' surveying and valuation department Kenneth Cheung predicted the Kowloon City plot will sell for HK$850 million, or HK$2,492 per square foot. The development could be priced at HK$4,200 psf for residential units and HK$6,000 psf for retail area, Cheung said.

The sale will be the second since the government announced the resumption of land sales this year.

The first auction of two plots at Ma On Shan and Sha Tin, also triggered by K Wah Properties last month, will be held on Tuesday and market watchers expect the government to fetch about HK$2 billion.

In January, the government released 17 lots on the application list after a 13-month suspension. Of those, 14 lots were residential sites. The application list programme was frozen under the government's market-stabilisation measures in November 2002. Future sales will only be from the list.

In March, Financial Secretary Henry Tang said revenue from public auctions and tenders is expected to reach HK$4.56 billion in 2004-05, representing about 38 per cent of the estimated total land sales income.

2. Sino Land seeks allies in projects
Raymond Wang

With a war chest of HK$11 billion, Sino Land says it is looking for partners to help replenish its land bank through tenders and auctions to be held in the next few weeks.

Among other possibilities, Sino Land is said to be considering joining consortiums tendering for the estimated HK$24 billion West Kowloon cultural hub project.

It is also expected to team up with other developers to jointly bid for two government residential plots in Sha Tin and Ma On Shan to be auctioned next week.

And a Sino Land spokeswoman said the company is considering whether to submit an expression of interest for an urban renewal project in Tai Kok Tsui after linking up with Manhattan Garments (International) to submit a tender for the HK$1 billion urban renewal project in Wan Chai last week.

Developers have been invited to bid for the HK$1 billion redevelopment project in Tai Kok Tsui, the third launched by the Urban Renewal Authority (URA) this year. Submissions will close next Friday.

Sino Land's gearing ratio has dropped from 28.5 per cent to 21.5 per cent its HK$1.5 billion convertible notes were fully exercised last month.

The company has around HK$3 billion of cash in hand, and together with credit lines it has HK$11 billion in its war chest.

Sino Land chairman Robert Ng is the latest tycoon to bet on the market, having invested more than HK$10 billion in the past two years.

The company shelled out more than HK$3 billion to secure three residential projects in Hong Kong and on the mainland last month.

Those projects include a joint development contract for an urban renewal project in Yeung Uk Road, Tsuen Wan, and one each in Shenzhen and Sichuan.

Bids for the 40-hectare West Kowloon cultural development close next month and at least 11 individual companies or groups are understood to have expressed interest in tendering.

Among them are Li Ka-shing's Cheung Kong Holdings, Sun Hung Kai Properties and Henderson Land. Sun Hung Kai is believed to be in talks with Cheung Kong for a possible joint-venture bid.

3. Developers aim to hit $30,000 psf mark for houses
Raymond Wang, The Standard 21 May 2004

Although there are signs of a market consolidation by year-end, developers predict prices of luxury detached houses will soar to a record HK$30,000 per square foot.

According to agents, prestigious locations, high quality and limited supply attracted buyers, causing both prices and transaction volume to surge in the first quarter of this year.

Shimao China Holdings executive director Jason Hui said he expects prices of townhouses to continue their rise, fuelled by the dearth of luxury houses.

``The mass residential market has shown signs of slowing and prices are likely to be adjusted, partly due to an expected rise in interest rates,'' he said.

However, prices of luxury houses on Island South and The Peak would reach as much as HK$30,000 per square foot before the end of this year as demand remains strong, according to a Henderson Land Development official.

Shimao hopes to generate about HK$300 million or HK$25,000 per square foot from the launch of The Genesis on The Peak in August.

One price reference for The Genesis is the 5,000-sq-ft house sale by PCCW chairman Richard Li this month.

Li sold one of seven detached houses at 22 to 28 Mount Gough Road, The Peak, to a local buyer for nearly HK$120 million, or about HK$24,000 per sq ft, making it the highest psf price, since a luxury home at Villa Rosa in Tai Tam, Island South, sold for almost HK$24,000 per sq ft in 1997.

Last month, New World Development sold a detached house at 33 Island Road, Deep Water Bay, for about HK$23,000 per sq ft.

Other developers such as Chinese Estates Holdings are expected to put up for sale this year four standalone houses at 31 Barker Road, The Peak, at an average price of about HK$25,000 psf, property agents said.

The Genesis, at 23 Severn Road, The Peak, will feature two detached houses with a total gross floor area of about 12,000 sq ft.

Henderson Land Development general manager of sales Donald Cheung said the company's luxury detached house project in Stanley could fetch as much as HK$30,000 per sq ft when it is offered for sale this year.

Midland Realty said the number of luxury house sales on The Peak and Island South soared by 120 per cent to 115 units in the first quarter compared with the fourth quarter of last year.

The average prices of townhouses on The Peak now exceeds HK$15,000 psf, while prevailing prices at Island South start at HK$10,000 psf.

4. $682m Kowloon site offer stirs market
SANDY LI and ERNEST KONG, SCMP 21 May 2004

A further auction of public land has been triggered following an aggressive bid for a Kowloon site that seemingly defies weakening sentiment in the face of sluggish demand and expectations of higher interest rates.

Aggressive mid-tier developer K Wah International Holdings is understood to have submitted a $682.2 million guaranteed bid for a Kowloon residential site through the application system.

The Lands Department yesterday confirmed the bid had met its minimum price and the Sa Po Road site in Kowloon City would be put up for auction next month.

It will be the third site to be offered publicly this year after a 20-month land sale freeze and comes in the wake of developers raising prices in response to improved demand, a trend that has weakened in recent weeks.

K Wah has emerged as a major market driver, having in the past month hit the minimum guaranteed bid at two other sites which will go to auction next Tuesday. The developer has committed to pay a reserve price of $1.2 billion for a Ma On Shan site and $469 million for a plot in Sha Tin.

Under the land sale system, a developer offers the Lands Department a minimum price it guarantees to pay for a site. If that meets the government's target reserve, the site will be brought to auction.

The $682.2 million offered by the developer for the Kowloon City site represents an accommodation value of about $2,000 per square foot. The site has a maximum gross floor area of 341,100 square feet.

HSBC property analyst Derek Cheung said the offer was at the "high end" of market prices.

Centaline Surveyors associate director James Cheung said he expected the site could fetch $2,300 per square foot at auction, about 15 per cent higher than the reserve price. That could translate to prices exceeding $4,000 per square foot for the completed flats.

"The property market has cooled down a lot recently, but the guaranteed minimum bid is still in line with former upbeat expectations," Mr Cheung said.

Yesterday, Nan Fung Development said it would slash prices for units in Aqua Blue in Siu Lam by 10 per cent. On Sunday, Nan Fung achieved good sales for its Tseung Kwan O Plaza in Tseung Kwan O and Summit Terrace in Tsuen Wan after 10 per cent price cuts.

Cheung Kong (Holdings) also said it planned to offer discounts for buyers of Sky Tower in To Kwa Wan following a price reduction for the remaining 40 units of Caribbean Coast phase one in Tung Chung.

Market sources say Sun Hung Kai Properties has increased the room for price negotiation with prospective buyers in the range of 5 to 8 per cent, up from 2 to 3 per cent.

In a further move to entice buyers, Paliburg Holdings is offering a $330,000 Jaguar car and a parking space for the first three buyers of $5.3 million units at its Rainbow Lodge project in Yuen Long.

Cheung Kong deputy chairman Victor Li Tzar-kuoi said yesterday recent price adjustments were healthy.

"If Hong Kong property prices run ahead of people's purchasing power, then prices have to be adjusted," Mr Li said after the company's annual general meeting.

5. Resumption of land in Wan Chai gazetted
Hong Kong Government, 21 May 2004

The Lands Department today (May 21) announced the resumption of land in Wan Chai for a redevelopment project of the Urban Renewal Authority (URA).

The redevelopment project has been included in the URA's Business Plan for 2002/03. Its implementation will help to rejuvenate the old district concerned and improve the living conditions of local residents.

A total of eight interests in Queen's Road East, Wan Chai will be resumed under the Lands Resumption Ordinance.

The affected interests will revert to the Government three months from the date of the Gazette Notice. Details of the private land affected are contained in the Gazette published today.

Apart from their entitlement to statutory compensation, eligible owners of domestic properties will be offered an ex-gratia home purchase allowance or supplementary allowance as appropriate.

Owners and tenants affected may make statutory claims under the Lands Resumption Ordinance and, if the claims cannot be settled by agreement, may apply to the Lands Tribunal for adjudication. Any professional fees reasonably incurred for making such a claim may be reimbursed by the Government. Occupiers of commercial properties may also be eligible for an ex-gratia allowance in lieu of the right to make statutory claims for business loss and disturbance.

Eligible domestic occupiers will be offered rehousing or an ex-gratia cash allowance in lieu of rehousing. Rehousing will be in units provided by the Hong Kong Housing Authority, the Hong Kong Housing Society, or the URA itself.

Upon completion of resumption and clearance, the Wan Chai site covering 380 square metres will be granted to the URA at nominal premium for redevelopment.

The project will contribute to general environmental improvements in the locality. While mixed use development is permitted on the site, the current proposal is for residential developments with commercial use on the lower floors.

6. Housing Department keeps frontline staff on alert against SARS
Hong Kong Government, 20 May 2004

The Housing Department (HD) today conducted a drill in Upper Ngau Tau Kok Estate to keep its frontline staff alert and prepared in dealing with possible resurgence of Severe Acute Respiratory Syndrome (SARS).

"Following the activation of the "Alert Level" of the three-tier Emergency Response System earlier this month, the drill is to test frontline staff's response should a confirmed SARS case occur," the Deputy Director of Housing (Estate Management), Mr Lau Kai-hung, said.

In today's drill, a tenant in the estate was supposedly confirmed to have SARS, activating the highest level of Emergency Response System.

A 40-member Special Cleansing Team comprising a medical officer from the Department of Health, health inspectors from the Food and Environmental Hygiene Department and cleansing workers from the property services company were called in to thoroughly disinfect the flat concerned.

An immediate inspection of the drainage system and vent pipe inside the concerned flat was also made, together with disinfection and cleaning of other public facilities, including lift lobbies and lifts.

Diluted household bleach was added into the flush water tank of the confirmed block and the lift pits were inspected and cleaned under the supervision of a Building Services Engineer.

Mr Lau said that HD would continue to deter hygiene-related misdeeds through the Marking Scheme.

"Since August last year, about 2,000 public housing tenants have accrued points for such misdeeds as spitting and littering, among them 31 were allotted with more than 10 points each," he said.

Mr. Lau reminded public housing tenants that a tenancy would be terminated when 16 points or more had been recorded within two years. He called on public housing tenants to maintain good personal hygiene habits by keeping their home and the estates clean.

"Estate hygiene is important to all public housing tenants regardless of whether the SARS alert is on or not," Mr Lau said, adding that public education would be stepped up through the distribution of publicity leaflets and display at notice board and lift lobby.

7. Lands Department to hold the second land auction this year
Hong Kong Government, 20 May 2004

The Lands Department announced today (May 20) that a residential site, New Kowloon Inland Lot No. 6330 at Sa Po Road, Kowloon City had been successfully triggered for sale under the Application List system. The sale of this lot will be by auction to be held next month.

A Lands Department spokesman said that the Government had accepted the applicant's minimum guaranteed bid of $682.2 million for the lot. This will be the starting price for the sale of the lot at the auction.

New Kowloon Inland Lot No. 6330 has a site area of about 3,521 square metres and a minimum gross floor area of 19,014 square metres is required to be completed. The permitted use under the lease conditions is for non-industrial (excluding hotel, cinema, petrol filling station and godown) purposes.

"The lot will be offered for sale in this year's second Government land auction to be held in the afternoon of June 15, 2004 at the Hong Kong Cultural Centre," the spokesman said.

The conditions of sale for the lot will be available for distribution and uploaded to the Lands Department's web page (http://www.info.gov.hk/landsd/) by May 28, 2004 when the particulars of the land auction will also be gazetted.

8. Housing Department Studies Public Housing Building Problems Report Findings
HKHA Press Release, 19 May 2004

The Housing Department (HD) will study carefully the findings and consider the recommendations of the Second Report of the Legislative Council Select Committee on Building Problems of Public Housing Units published today (Wednesday).

"The recommendations are constructive and useful. The inquiry is thorough and comprehensive," a spokesman for the Housing, Planning & Lands Bureau said.

He thanked the Select Committee for its hard work since 2001.

The spokesman noted that HD had been implementing all the recommendations for public housing building quality improvement as detailed in the First Report published in January last year.

"The recommendations covering institutional framework, project management and site supervision have been fully implemented. The institutional framework has been overhauled and streamlined. The entire project management system has been revamped and site supervision substantially strengthened," he said.

"We will continue to co-operate with stakeholders to improve the quality of public housing and foster a quality-oriented construction industry," the spokesman added.

Referring to the point about provision of information to the Select Committee, the spokesman said that the Administration had no intention to withhold information from the Select Committee.

"The Administration is committed to co-operating with the Legislative Council fully on all matters relating to the inquiry. HD has all along provided the Select Committee with all the required information to assist its inquiry," he said.

On accountability of HD officers, the spokesman said that the department would examine any new issues in a fair manner according to established civil service procedures and principles.