- Company opposed to government taking back plots set aside for private residential and commercial use, as well as land that has not been zoned yet
- SHKP has five to seven plots in areas already zoned for subsidised housing
Sun Hung Kai Properties, Hong Kong's largest developer by value, has said it will cooperate with the government should it use the Lands Resumption Ordinance to acquire rural land it owns, but only as far as land already zoned for public housing use was concerned.
The developer has five to seven plots in areas already zoned for subsidised housing in Hung Shui Kiu and in the northern New Territories. It holds 300 hectares of farmland in total, of which two-thirds is in different stages of land-use conversion. The remaining third is still in the process of amalgamation, as these lands are relatively small in size.
"This land is scattered in different places. In this atmosphere, we will cooperate with the government if it invokes the Lands Resumption Ordinance," Mike Wong Chik-wing, the company's deputy managing director, said.
SHKP was, however, opposed to the government seizing plots set aside for private residential and commercial purposes, as well as land that had not been zoned yet. "We have spent 30-40 years assembling these lands. The government should respect the Basic Law, which protects private property. The Lands Resumption Ordinance should be a last resort for the government to address the land supply issue," Wong said.
The company's statement comes a week after mainland Chinese state-owned media said unaffordable housing was to blame for the protests that have rocked Hong Kong for 16 weeks now. It urged the Hong Kong government to boost housing by seizing land being hoarded by developers with "vested interests".
Besides the Lands Resumption Ordinance, Wong said, there were other options available to the government as far as increasing land supply was concerned. It could increase the ratio of a building's total floor area to the size of the site it was being built on, from one to five times for rural land, for instance.
The government could also speed up the processing of land-use conversion applications and accelerate infrastructure development to improve accessibility in rural areas, which would speed up housing estate development.
"SHKP's holding is just 3.6 per cent of the 8,300 hectares of total farmland in Hong Kong," he said. While four of Hong Kong's big developers hold 1,000 hectares, the remaining 7,300 hectares are held by the government, private individuals and tsos (ancestral lands) or tongs (clans).
Wong also questioned the ordinance's effectiveness. He said the government had taken back a 300,000 sq ft site in Tuen Mun from the company in 2014 with the aim of building subsidised housing. SHKP received about HK$900 per square foot as compensation.
"The site has still not been developed," he said. "If the government had not taken it back and let us develop it, a private residential project would have been completed, with all units sold to homebuyers, by now," he said.
Wong also rejected the idea that SHKP was hoarding land and said the company, which has the second-largest holding of farmland among developers, had converted nine million sq ft to build 15,000 units, which would be ready for sale in five years. He said the company was "actively" applying to convert its farmland.
Moreover, on Friday, it secured approval from the Town Planning Board to increase the number of units it could build on newly converted rural land in Kwu Tung, from 90 villas to 1,573 units of 700 sq ft each.
Industry observers take a different view of the situation.
"(The developers) started buying farmland several decades ago, for as low as HK$10-20 per square foot in areas that were inaccessible by public transport, and for HK$100 per square foot in areas closer to motorways. Their huge land reserves indicate developers knew hoarding land even for several decades would never be a loss-making enterprise in Hong Kong," said Lee Wing-tat, chairman of Land Watch.
Industry expects home prices, sales and rents to drop due to protests
Wong, however, said red tape was to blame for undeveloped farmland. He said the company secured approval from the Town Planning Board to convert a site near Tai Lam Chung Reservoir in Tuen Mun into a 1,800-unit project with a gross floor area of 9 million sq ft in 1996.
"We still have not received a land premium offer from the government. It has been stalled for 23 years due to complicated processes required by different departments," Wong said.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.