More sites set to test developers' appetites
The Government has four more sites on this year's land disposal programme application list that can be used to develop hotels.
Apart from the 2.93-hectare waterfront commercial lot in the Hunghom reclamation area, another large tract of land, zoned for commercial-residential use, is in Oil Street, North Point.
It covers 1.46 hectares and has gross floor area potential of 1.66 million square feet.
The development must include at least 530,000 sq ft of residential space and the rest can be hotel, office or retail space.
Another site is on Yeung Uk Road, Tsuen Wan, and spans 1.42 hectares, with a maximum gross floor area of 1.45 million sq ft. The site had been zoned for hotel development in 1997 but the use has changed to commercial-residential to provide flexibility for development.
Developers can opt to develop the site for office, retail or residential use, or a mix.
The maximum area for residential use is restricted to 764,000 sq ft.
A smaller commercial plot in Tin Shui Wai, spanning about 70,000 sq ft, can provide a total developable area of nearly 280,000 sq ft.
The plot can be used to build a hotel with a maximum of 260 rooms or office blocks with a minimum retail area of 53,800 sq ft.
Surpass Property Strategy managing director Charles Lai Chin-pang said the Government had made a wise decision to permit more flexibility in land use, thus justifying a higher market price for the sites.
'Hotel development bears a much higher risk than office because the development time involved is longer, construction cost is higher and future profit could fluctuate even though Hong Kong tourism prospects are good,' he said.
However, he said the Government was providing certain incentives for hotel development. These included bonus plot ratios for the ground-floor reception and baggage loading areas and exemption of back-office space from the calculable gross floor area.