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1. Henderson to fork Henderson to fork out $3b for project

2. Cheung Kong agrees to buy ATV site for $600m

3. ATV sells Kowloon Tong base for $600m

4. Why walkway was never built

1. Henderson to fork Henderson to fork out $3b for project
Raymond Wang, The Standard 5 May 2005

Henderson Land Development said its planned redevelopment of the former site of the Nestle Dairy Farm plant in Kwun Tong will cost more than HK$3 billion.

The mega office-retail project will yield gross floor area of 1.2 million square feet and become a landmark development in the district, Henderson chairman Lee Shau-kee said.

The 100,000 square foot site at 223-231 Wai Yip Street, which is now vacant, is zoned for office-retail development. It has a plot ratio of 12 times.

Henderson 's estimated investment of more than HK$3 billion includes the cost of the land, which Henderson bought in 1993 for more than HK$1.1 billion, and construction costs of nearly HK$2 billion.

The company also had to pay the government a land premium of almost HK$200 million to change the site's zoning to commercial from industrial.

Lee said Henderson recently paid land premiums for two industrial blocks in San Po Kong, which will be converted to mid-tariff hotels with a total of 990 rooms. Fortunately for Henderson, it accepted the government's land premium offers of about HK$350 million, or HK$1,000 per square foot, for the hotel projects before February's auction of a commercial-hotel site in Kowloon Bay.

The auction price far exceeded estimates and signaled higher land premiums in future.

In San Po Kong, Henderson plans a 45-story hotel with 600 rooms at 112 King Fuk Street. A 31-story hotel will be built on a 10,000 sq ft site at 9-11 Sheung Hei Street, providing 390 rooms.

Lee agrees land premium rates should be pegged to market prices and land auction results. ``But it would be better if the government does not follow such levels in full because the increase in land premium prices has exceeded the leap in home prices,'' he said.

He said the high price paid for the Kowloon Bay site is the latest indication that costs have become too high for many builders.

``Land premium costs in Kwun Tong have jumped to around HK$1,500 psf after the auction, significantly higher than those of a year ago. On the other hand, home prices have only seen a mild increase over the past year.'' Lee predicts residential prices will climb 5 percent to 10 percent this year, undeterred by rising interest rates in the United States.

``Hong Kong has excess liquidity and local banks may not follow the US in increasing interest rates,'' he said. ``If interest rate increases are mild this year, we will see steady development in the property market.''

2. Cheung Kong agrees to buy ATV site for $600m
Raymond Wang, The Standard 5 May 2005

Cheung Kong (Holdings), Hong Kong's No1 property developer by sales, has agreed to buy Asia Television's headquarters in Kowloon Tong for about HK$600 million, a source close to the deal said last night.

The source said Cheung Kong, controlled by billionaire Li Ka-shing, plans to redevelop the 50,000-square-foot Broadcast Drive site into a luxury residential property with gross floor area of 105,000 sq ft. The site has a plot ratio of 2.1 times.

The project will require total investment of more than HK$800 million, or HK$7,700 per square foot, the source said.

Apartments in the area are selling at more than HK$10,000 psf.

The Hong Kong broadcaster confirmed earlier that it was close to agreeing to sell the site. Neither ATV nor Cheung Kong was available for comment Wednesday.

Cheung Kong may team up with conglomerate associate Hutchison Whampoa to develop the Kowloon Tong project, the source said.

The developer has been active in buying land in Kowloon Tong over the past decade after acquiring a nearby former Television Broadcasts headquarters site nine years ago, which was later redeveloped into Peninsula Heights.

Market sources said Cheung Kong is also eyeing Zuso Apartments, another luxury residential property in Kowloon Tong, estimated to be worth more than HK$2 billion.

The company plans to make an offer of nearly HK$6,000 psf for the 125,970 sq ft site involving 117 property owners on the existing building.

The property is expected to be redeveloped into a luxury project with potential gross floor area of 377,910 sq ft. Cheung Kong said earlier it raked in HK$300 million from flat sales at One Beacon Hill in Kowloon Tong in the first quarter.

The next batch of 10 homes in the project will be offered for sale in the second quarter, with an expected price tag of up to HK$14,000 psf.

First-quarter sales at the project comprised 15 apartments with prices starting at more than HK$10,000 psf.

3. ATV sells Kowloon Tong base for $600m
SANDY LI , SCMP 5 May 2005

Hong Kong 's No2 free-to-air broadcaster, Asia Television, has sold its Kowloon Tong headquarters to Cheung Kong (Holdings) for at least $600 million.

The headquarters at 81 Broadcast Drive, with a site area of about 50,000 square feet, has a gross floor area of 105,000 sq ft. The $600 million sale price translates to $5,714 per square foot.

"We have signed the contract," ATV chief executive Chan Wing-kee confirmed yesterday.

The price tag was based on the existing plot ratio of 2.1, but the agreement called for a higher price if the government allowed Cheung Kong to increase the plot ratio, Mr Chan said.

"We will receive more money if the buyer manages to increase the permitted plot ratio through negotiation with the government in future," he said.

Mr Chan noted that Peninsula Heights, a luxury residential building adjacent to the ATV headquarters and also developed by Cheung Kong, had a plot ratio of 4.5.

If Cheung Kong is able to raise the plot ratio to 4.5, the site's total permitted gross floor area will increase to 225,000 sq ft.

In this case, the value of the property will increase to $1.28 billion.

Mr Chan said ATV would transfer possession of the site to Cheung Kong two years after the completion of the transaction.

The sale proceeds would be used to set up a bigger production base elsewhere, with Tai Po as one option, he said.

"The new production base will be double the size of the Kowloon Tong headquarters," he said.

Mr Chan said Cheung Kong planned to redevelop the Kowloon Tong headquarters into a luxury residential project.

4. Why walkway was never built
POLLY HUI , SCMP 5 May 2005

A flawed town-planning deal allowed developer Sir Gordon Wu Ying-sheung to dodge his promise to build a pedestrian walkway in Wan Chai, legislator Alan Leong Kah-kit said yesterday.

The legislator said the walkway was part of the tycoon's development plan for Wu Chung House, presented to the Town Planning Board more than a decade ago. It was to be built across Queen's Road East, to ease the pedestrian flow from Wu Chung House and the controversial, yet-to-be-built Mega Tower hotel. The plan was approved by the Town Planning Board.

But construction of the walkway was to be preceded by a land exchange between the government and the developer for the neighbouring Mega Tower project, which has still not made much progress. Under the land lease, Sir Gordon had to build the walkway within 12 months of the land exchange.

"Since the completion and occupation of Wu Chung House in 1992, the walkway has not been constructed," said Mr Leung. "The problem is that some members of the Town Planning Board could have been led into believing that the walkway would be built no matter what happens. But the truth is, Sir Gordon has the final say in whether to build the Mega Tower, which is a prerequisite for the construction of the walkway," he said.

He called for a review of land-use and town-planning policies.