A landmark Grade A office tower in Tsuen Wan has successfully shaken off a restrictive land-sale covenant, paving ways for the developer to sell the property in individual units rather than as a whole building.
Billion Development and Project Management has secured a lease modification for Plaza 88, allowing strata-title sales of the office units, The Standard’s sister publication Sing Tao Daily reported.
The premium paid was merely a symbolic HK$20 per square foot and based on the office tower’s gross floor area of more than 300,000 sq ft, the total land premium amounted to just over HK$6 million, the report said, citing sources.
The developer’s founder Yu Cheuk-yi said the relaxation applies only to the office component, while the retail podium remains subject to the whole-building disposal requirement.
Even if the offices are sold separately in future, they will continue to be managed under a unified management system to maintain quality, he said.
In a response to Sing Tao, the Lands Department said that if an owner seeks to amend or relax lease conditions, the department will process the application under established procedures and after consulting relevant government departments.
The government tightened conditions on commercial land sales by imposing a “Restriction on Alienation – Only Disposable as Whole” clause during the property boom in 2013.
Owners wishing to dispose of such properties are then required to sell the entire building to a single buyer rather than break it up into smaller units.
However, the office market has been undergoing a deep correction since 2019 and remains weak.
According to the latest data from the Rating and Valuation Department, the vacancy rate for Grade A offices stood at 18.4 percent at the end of last year, representing nearly 17.93 million sq ft of vacant space.
Industry participants said the move sets an important precedent and could provide much-needed support to the market.
They expect more Grade A office projects to seek similar relaxations in the future.
