2025-02-21 28Hse Editor
Henderson Land (0012) is set to receive HK$3.9 billion from the government as compensation for a site in Hung Shui Kiu, indicating the developer's potential withdrawal from the project. This development is part of a broader trend where major developers are showing caution towards the ambitious Northern Metropolis project due to concerns about high infrastructure costs and land premiums.
Last Thursday, the government announced its decision to reclaim approximately 176 hectares of land as part of the Phase II development of the Hung Shui Kiu/Ha Tsuen New Development project. Residents affected by this reclamation will be compensated accordingly.
Henderson disclosed that out of its 6.67 million sq ft land reserve in Hung Shui Kiu, about 3.5 million sq ft would be resumed by the government, with compensation estimated at HK$3.9 billion, based on a rate of HK$1,114 per sq ft as stated in the gazette notice.
Additionally, for the Kwu Tung North/Fanling North New Development Areas earlier in April, Henderson is expected to receive roughly HK$1.86 billion for 1.45 million sq ft of land it owns.
As a result of this compensation for the Hung Shui Kiu site, Henderson is projected to record a pretax profit of HK$3.1 billion for the current financial year ending in December.
The Hung Shui Kiu project aims to contribute about 9.7 million sq ft of non-residential gross floor area to the Northern Metropolis, aligning with China's 14th Five-Year Plan.
With the land exchange applications for these sites having closed at the end of April, the Lands Department reported receiving a total of nine applications.
A major developer, speaking anonymously last month, urged the government to revise the plan, citing a high office vacancy rate in Hong Kong and proposing that 40 percent of the designated floor space be used to create 8,000 residential units. The developer also warned that adherence to the current plan might deter their participation.
In response, the Development Bureau emphasized the importance of focusing on long-term growth amidst the current environment of high interest rates and subdued housing demand. This cautious approach is reflected in local developers' reluctance to acquire new sites while they focus on reducing their inventories of new homes.
According to Centaline Property Agency, the secondary market experienced a significant drop, with only six transactions recorded at the 10 blue-chip estates over the weekend, marking a 40 percent decrease week on week. The agency attributed this slump to poor weather and a scarcity of low-priced units on the market.
Meanwhile, Hong Kong Property Services reported seven transactions in its 10 major estates during the same period, indicating continued challenges in the housing market.
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