Major developers own 20pc farmland

Business | Avery Chen and Kevin Xu 16 Sep 2019

Four major local developers - Henderson Land Development (0012), Sun Hung Kai Properties (0016), New World Development (0017) and CK Asset (1113) - hold about 20 percent of the total farmland in Hong Kong, with Henderson Land Development the biggest owner and CK Asset the smallest, as of December 2018, data from Bank of America Merrill Lynch's report showed.

Hong Kong has 50 square kilometers of agricultural land, accounting for 4.5 percent of the total land area, according to the Planning Department.

The government is considering to invoke the Land Resumption Ordinance to increase land supply by resuming farmland from developers for public housing.

Bank of America Merrill Lynch estimates the government would require 8 million sq ft of farmland and projected an additional 8 million sq ft of site farmland would be needed for greenbelt areas, public facilities, etc.

It would cost the government up to HK$22 billion and each of the four major developers that own farmland should get a maximum of HK$5 billion to HK$7 billion in cash compensation.

The four developers have acquired nearly 10 sq km of farmlands, equivalent to about half the built-up area on Hong Kong Island. SHKP has 2.88 sq km, New World Development owns 1.58 sq km, and CK Asset holds 1.24 sq km.

Meanwhile, at least seven mainland property developers acquired about 5.45 million sq ft farmland in New Territories, including China Overseas Land and Investment (0688), Agile Group (3383), Top Spring International (3688), LVGEM (China) Real Estate Investment (0095) and Citic Pacific, according to Liber Research Community.

Separately, SHKP released 176 flats on the second price list of Cullinan West III, with an average per square foot price of HK$24,340 after discount, 12 percent higher than that of the first price list.

The cheapest 275-sq-ft unit is priced at HK$6.15 million, or HK$22,359 per sq ft. The project will be launched for sale as soon as Thursday and has received about 2,500 subscriptions.

In the secondary market, Centaline Property Agency recorded 10 transactions over the weekend in the ten major housing estates, down by 1 transaction or 9.1 percent compared with a week before.

Developers are stepping up and have launched new projects recently in the primary market at "restrained" prices close to the secondary market, amid worries about the rollout of the vacancy tax, and this has caught the attention of some buyers from the secondary market, said Ricacorp chief executive Willy Liu Wai-keung.

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