Private flats to be built under a plan to tap Hong Kong developers’ land reserves will not necessarily cost more and is a “win-win” solution for all stakeholders, even though most of the land is earmarked for public housing under the proposal, according to Ricky Wong Kwong-yiu, managing director of Wheelock Properties.
Under the Land Sharing Pilot Scheme initiated in May last year, owners of farmland can apply to the government to increase the development density of their sites, but they must set aside at least 70 per cent of the increased floor area for affordable public sector housing. In return, the government will improve the infrastructural development to enhance the development intensity of the private lots and speed up various planning and project approvals.
Chief Executive Carrie Lam Cheng Yuet-ngor announced the plan in 2019 to help solve the city’s housing crunch, which she said was partly responsible for fuelling the social unrest that broke out that year. She appealed to developers to share their “social responsibility”.
“The project will only be economically viable when the government carries out infrastructure development like building roads, drainage and sewage systems to support a higher building density,” said Wong.
The government has so far received three applications from developers under the Land Sharing Pilot Scheme aimed at unlocking farmland for housing. Nan Fung Development, which was the first to submit its plan in July, said it plans to build 1,149 public housing and starter homes in Tai Po by 2025, while providing 493 private flats by 2028. Sun Hung Kai Properties’ proposal, submitted last month, calls for 2,616 public housing and 1,474 private flats on a site on Ho Chau Road in Yuen Long.
Wheelock and Henderson’s plan, also submitted last month, is the biggest submitted under the Land Sharing Pilot Scheme so far. It calls for 12,120 units to be built on 19.3 hectares (2.08 million square feet) of farmland in Lam Tsuen, Tai Po, with 70 per cent or 8,484 units to be set aside for public housing and the remaining 30 per cent, or 3,636 units for private buyers.
Their proposal calls for a plot ratio of 3.3 times, up from 0.4 times, raising the site’s total gross floor area to nearly 6.9 million sq ft.
Ricky Wong Kwong-yiu, managing director of Wheelock Properties. Photo: Edmond So
Wong said that the plot in Lam Tsuen has been left vacant for about 20 years, and it will continue to remain so in the absence of infrastructure. “Now, we have the opportunity to unlock the farmland for housing,” he said, adding that this will not necessarily lead to higher prices of private flats to compensate for the higher ratio that has to be set aside for public housing.
Four major Hong Kong developers – Henderson, SHKP, New World Development and CK Asset Holdings – hold an estimated 100 million sq ft of farmland, which they acquired for between HK$300 and HK$400 per square foot some 20 to 30 years ago, said Raymond Cheng, head of China and Hong Kong research at CGS-CIMB Securities.
“Even if the four developers donate all their farmland to the government, it will only cost them HK$20 billion, which is an insignificant amount for them,” said Cheng.
Their farmland, once converted into housing at a plot ratio of six times, could supply as many as 400,000 homes if fully utilised, he added.
Wong said the project is awaiting approval from the newly created Land Sharing Office and the Town Planning Board. It also has to negotiate the land premium payable for conversion of the land from farmland to housing.
“If everything goes smoothly, the residents can move in as early as 2027,” he said.
Wong said Wheelock was not viewing the project from a commercial standpoint, noting that it was a win-win solution for the company and the government.
“Developers can develop their farmland and the government can increase supply of public housing,” he said.Internet Explorer Channel Network