Henderson Land increases farmland donation as tycoons step up to help government ease housing crisis

By Peggy Sito peggy.sito@scmp.com / https://www.scmp.com/business/article/3035849/henderson-land-increases-farmland-donation-tycoons-step-help-government?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | November 26, 2019 11:57 AM SGT
Henderson Land Development, Hong Kong's third-largest property company with a market capitalisation of HK$189.9 billion (US$24.2 billion), will loan 430,000 sq ft of farmland to the city's government for seven years for the development of 2,000 transitional housing units, according to a source familiar with the matter.
The donation of land in Yuen Long in the New Territories more than quadruples the company's commitment of 100,000 sq ft announced this month as Hong Kong steps up efforts to ease its housing crisis, and will amount to the largest such pledge by a private landowner. Henderson Land will announce its intention during a symposium on transitional housing organised by the city's government on Saturday. The donation is subject to the government accepting its offer.
"The donation shows the company's support for the government as it seeks to ease the housing crisis," said the source who asked not to be named.
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In September, the company said it would not contest any resumption of farmland by the government, after the Lands Department announced plans to take back 784 plots of private farmland covering 7.3 million sq ft in the northern New Territories, on which 21,000 new homes will be built in the first phase. Henderson said it owned 1 million sq ft, or 14 per cent, of the land to be taken back by the government.
Transitional housing is short-term accommodation provided to help vulnerable individuals or households awaiting longer-term housing. In Hong Kong, such housing involves the strategic use of vacant property, or idle sites not ready for long-term housing estates. According to the government's estimates, Hong Kong will have about 1,250 units of transitional housing, including existing units and those to be built, by next year.
According to the latest government figures, as of June this year, there were altogether 256,100 applications for public rental housing accommodation, while the average waiting time for flat allocation had risen to more than five years.
Henderson Land has Hong Kong's largest holding of farmland, which amounted to 45 million sq ft at the end of last year, according to a report published by Bank of America Merrill Lynch in September. According to the bank, some leading developers in the city hold a combined 100 million sq ft of farmland.
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Located at Kong Ha Wai, Kam Sheung Road in Yuen Long, the site to be donated is currently brownfield land, which refers to degraded agricultural land occupied by businesses for car parks. Henderson Land will undertake preliminary work, such as appointing consultants for planning and design, before handing over the site to the government, which will then appoint non-profit organisations to operate the project, the source said.
Henderson Land's donation comes after New World Development announced plans in September to donate about a fifth of its farmland reserves to Hong Kong's government and to non-profit organisations for the development of social or public homes, in a step towards easing the city's housing shortage.
In the first phase, New World plans to donate three pieces of land totalling 28,000 sq ft next to the Tin Shui Wai subway station to Light Be, a non-profit specialist in social housing and tenant development that New World had been working with, for building 100 homes each measuring 300 sq ft.
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Sun Hung Kai Properties, Hong Kong's biggest developer, had 30 million sq ft of farmland as of the end of 2018, while CK Asset Holdings and New World Development, both among Hong Kong's top 10 property developers, had farmland holdings of 9 million sq ft and more than 16 million sq ft, respectively, according to Bank of America Merrill Lynch.
Hong Kong officially slipped into a technical recession as its economy shrank 3.2 per cent in the third quarter amid the US-China trade war and five months of anti-government protests. The city's housing crisis is viewed as fuelling the wider discontent that has led to angry protesters taking to the streets.
In her Policy Address on October 16, Hong Kong leader Carrie Lam Cheng Yuet-ngor said she will ensure "every Hong Kong citizen and his family will no longer have to be troubled by, or preoccupied with the housing problem. Resuming farmland from private stakeholders for new home development is an option".
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.