Hong Kong's Wen Wei Po (Reporter Leung Yuk Cum)As for MTR Tin Wing Station residential project,Pak Shek Kok residential land failed the bids continuously,executive director who is in charge of the architectural design of the Cheung Kong Group Chung Chun Kung admitted that two lands with poor geological and high contrast for the plannings,the government has failed to offer a corresponding reduction in these lands,so as the developers facing the soaring
construction costs and other issues,they will bid them carefully.Chung Chun Keung favor of importing foreign labor in order to solve the manpower shortage,but also refers to the profit which calculated by the developers have only 3% to 5% annually,a project with a total construction period of five years,the returns of about 15-25%.
Chung Chun Kung pointed out that the demand of living environment is increasing in the recent years,the government has changed these requirements into the planning,the lease and as well as the provisions of the building,as the developers bought the lands,for example,included (1) pre-planning application;(2) building plans and planning application,(3) the lease, plan approval and (4) the construction period,and subject to the approval of many government departments before the construction started,so it cause the construction period extended from the previous three to four years to 4 years to 6 years now and during the period,the interest rate risk should be beared by the developers.
The lands which failed the bid before were with poor geological and high requirement
He said that the land in Tin Wing Station and the residential land in Pak Shek Kok which have failed the bid before,for example,the geology of Tin Wing Station'there are a lot of caves ', at least one third of the lands can not be built for the building,also the planning requirements were strict,but also need to move the station; As for the
residential land in Pak Shek Kok,its planning design,there are only a few of units can with a sea-view,also need to do a noise assessment which cause this two of lands can not necessarily represent the actual buildable plot ratio of its provisions.At the same time,the property prices were affected by the land prices,construction costs,interest and development costs and a number of factors,as the construction costs are currently rising,which have increased more than 1 times higher than five years ago,it is expected that it will keep on rising in the future,coupled with the developers needs to subsidize the stamp duty for the property sales,under this calculation,the bid will not high naturally.
Fung Lok Wai entangled for 20 years and still haven't started the construction yet
He cites an example of DIVA which located in North Point,the currently priced at about HKD $15,000 per sq.feet,the buildable sq.feet of about HKD $12,000,the construction costs at least HKD $4,000 per sq ft,coupled with the interest rate and the other development costs of about HKD $2,000 per sq.ft and the urban land price of approximately HKD $5,000 to HKD $6,000 per sq.ft for calculation,the current property prices have no profit at all.As for the Fung Lok Wai project
by The Group have also entangled for 20 years and finally approved by the TPB last year,with attaching conditions to be built residential properties,but it have not yet commenced the operations.
In addition,as for the land which located in Pak Shekin Ma On Shan which will be closed the bid tomorrow,he pointed out that the project requires two green belts,so that it cause the lands which can be built for the building reduced,also it have difficulty on the architectural design and it is believed that the price of the bid won't be high either.Under the new construction legislation,the parking lot which was built in the basement is not included in the plot ratio,but the construction cost per square foot was HKD $300 to HKD $400 per sq.ft higher than building the parking lot on the ground,in fact,it also contributed to rising the construction costs.
It is recommended that the land sales should follow the example of Singapore of opening the result of the bid immediately
As for the governments have a number of lands have failed the bids continuously,it will affect the supply of private flats per year or not,he believes that the government will see the actual situation and with its own solutions.He also suggested that the Government could follow the example of Singapore URA tender,opening the result of the bid immediately and marked clearly with each tender offer in order to let the market to be more transparent.However,he said that the group will keep on studying on different lands in Hong Kong,such as the URA redevelopment project which located in Graham Street,Central.
He added that since the government launched out ten major infrastructure projects,also Macau grabbed some of the construction
workers from Hong Kong,coupled with there are Hong Kong developers due to the fact that receiving the Hong Kong projects with losing money in the end recently,so they rather breakthrough the outside and it have become the main cause of rising construction costs.Meanwhile,the current Hong Kong construction costs,labor accounts for half of the construction costs,but the cost of construction materials is relatively stable in recent years,more than 500 units of the large housing estates with a construction cost per square foot of HKD $2,000 or less then it in 2010 and now has risen to HKD $4,000 per sq.ft,as for the hundreds of units in a single buildings with a construction costs of HKD $6,000 to HKD $7,000 per sq.ft,as for the mansion building in The Peak rose to more than HKD $10,000 per sq.ft.Because there are a few of young people are willing to join the construction industry,so he believes there is a need to import foreign workers in Hong Kong,but it is expected that there will be some political pressure on this problem and believed that the government will try to solve.
