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Property News Weekly Digest
〈Asian Post, Dec 19, 2020〉Developers may take part under seldom-used cash and design approach for 'important' Central harbourfront plot tender that closes next June

Hong Kong's biggest developer by value, Sun Hung Kai Properties, and privately held Chinachem Group said they might bid for a prime plot of commercial land to be sold via a rare tender process that takes into account participants' design plans as well as cash bids.

The government is using this so-called two-envelope approach for the sale of New Central Harbourfront Site 3, meaning the winner will be determined by both price and design proposal. This deviates from the practice of awarding sites based on the highest bid alone, which has been used consistently for the past 18 years.

The 516,000 sq ft site is next to the International Finance Centre, and was described by one property agent as the "most precious" plot to go on sale since the development of that tower.

Of 11 major developers polled by the Post, only SHKP and Chinachem said they were interested in the parcel.

〈The Standard, Dec 18, 2020〉Chief Executive Carrie Lam Cheng Yuet-ngor released her latest Policy Address on Nov 25 after a one-month delay. The Policy Address made no mention on relaunching the Tenants Purchase Scheme. However, as the TPS is crucial in enabling low-income families to fulfill their home ownership aspirations, while helping to create wealth within the community and improving livelihood conditions, the government should reconsider the issue seriously to avoid failing to deliver its original intention of goodwill.

Back in October this year, the chief executive and Secretary for Transport and Housing Frank Chan Fan expressed their views that it is not the right time for relaunching the TPS. Both senior officials referred to statistics from the past five years, noting an annual average of 12,000 units were recovered and reallocated to applicants for Public Rental Housing. Their reasoning is that if there is a large-scale relaunch of the TPS, it will sharply decrease the supply of such housing and vastly lengthen the waiting time for those queuing up for a PRH unit. However, there is evidence, in at least three aspects, that the scenario was exaggerated.

Firstly, the number of PRH units recovered each year for the purpose of reallocation was fewer than 12,000. According to the written reply by the Bureau to a Legislative Councillor in May 2020, the figure of 12,000, in fact, included units surrendered by PRH tenants due to transfer. However, these units would not be used for reallocation. If we deduct these units, then the number of units available for reallocation was just 8,700 per year on average.

〈Asian Post, Dec 17, 2020〉New World Development (0017) said its land investment in mainland China may exceed that in Hong Kong in the near future, as a new Chinese policy gives it an edge over indebted peers in the hunt for premium land in the Greater Bay Area.

"Some Chinese peers who were competing with us are now being restricted by the three red lines," said chief executive Adrian Cheng Chi-kong, who took over the top job at the HK$95 billion conglomerate from his father in May. "We're not restricted, so we are able to get even better land," Cheng said, adding the Hong Kong-based company passed all three red lines because its gearing was only at 40 percent versus high double digits among mainland Chinese peers.

The bulk of New World's mainland investment will focus on redevelopment projects, which convert old villages into mix-used integrated property complex, involve a long development time but yield attractive margins, Cheng said.

"We'll continue to buy some premium land in the Greater Bay Area," Cheng added. It sees similar sales contractions in mainland China and Hong Kong this year but expects mainland sales to grow in double digits in the next few years

〈China Daily, Dec 16, 2020〉Potential buyers are sitting on the fence, with some changing course to rent a flat, thus raising demand for leases. There has been a general increase in transactions involving new properties in many districts recently, especially for small and medium-sized units.

Mount Regency, a new development in Tuen Mun, has an average lease price of HK$11,000 a month and attracts many young tenants. The studio flats and one-bedroom units were best received, fetching a rental return of about 2.5 percent.

Alen Leung from Ricacorp Properties said December is off-season so the number of rental deals is coming in fewer than in the past two months.

Of new developments, Mount Regency is offering more units for leasing.

New developments launched by Sun Hung Kai Properties in recent years have been of good quality so their units are sought after in the rental market.

Studio flats at the Esplanade, in the same district, are to be had at a minimum rent of HK$10,000.

Leung said the average rental price in Tuen Mun now ranges from HK$33 to $35 per square foot.

As the high-quality rentals in the district have long been digested by the market, Leung pointed out that tenants usually need a longer time to consider.

〈The Standard, Dec 15, 2020〉MTR Corporation (0066) is inviting expressions of interest for Wong Chuk Hang Station Package Five Property Development from today until December 22.

The package will provide at least 1,050 homes.

Wong Chuk Hang Station Property Development, situated on Aberdeen Inland Lot No. 467 is a comprehensive development located atop the MTR Wong Chuk Hang Depot and adjacent to MTR Wong Chuk Hang Station.

Package five is located at the eastern part of the lot, with a residential gross floor area of 636,147 square feet.

In October last year, Kerry Properties (0683), Swire Properties (1972) and Sino Land (0083) won the tender for the package four residential project.

The trio of local developers was reported to be paying a HK$6.76 billion land premium for the plot, or a gross floor area HK$10,587 per sq ft - the highest among all the first four phases of the project.

Meanwhile, the Buildings Department approved 22 building plans in October, with eight on Hong Kong Island, seven in Kowloon and seven in the New Territories. The department also issued 11 occupation permits, with three on Hong Kong Island, five in Kowloon and three in the New Territories.