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Paul Chan

Hong Kong land leases should be renewed ‘10 years in advance’ to avoid future uncertainty

Hong Kong Institute of Surveyors suggests extending period for renewals

PUBLISHED : Friday, 07 October, 2016, 12:40am
UPDATED : Friday, 07 October, 2016, 12:41am

Land leases which are currently renewed two years from expiry should be dealt with at least 10 years in advance, the Hong Kong Institute of Surveyors has suggested.

The recommendation was to address a “cliff” in 2047, when a 50-year extension to the majority of leases in the New Territories and parts of Kowloon which expired in 1997 was due to end, prompting fears that property owners would lose their assets.

But institute president Lau Chun-kong said the government’s policy towards lease extensions or renewals has been clear and transparent, and anyone who wishes to learn more could simply refer to the Lands Department’s website.

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“The idea that the government might seize back land as the leases expire in 2047 is purely speculation. We should have trust on our administration that it would handle the matter with Hong Kong’s overall interests in mind,” Lau said.

But rather than approaching leases two years before expiry, the surveyor said this could be done 10 years in advance to allow ample time for land officials and alleviate public uncertainty.

“Lease extensions or renewals are done case by case, so you can imagine the workload of our [civil servants]. We should be more understanding on this front,” Lau explained.

In the mean time, a taskforce should be set up to steer discussions on such issues, coupled with publicity campaigns to teach property owners how they could facilitate extension of leases.

Development minister Paul Chan Mo-po had promised during a Post interview in August that there will be a “smart solution” similar to the 1997 arrangement.

Unlike Hong Kong island and parts of Kowloon which was ceded to Britain, the Kowloon area north of Boundary Street and the New Territories was leased in 1898 for a period of 99 years.

About 350,000 of those leases were extended for 50 years in 1997, with a three per cent of ratable value set as annual government rent.

The institute would not speculate whether the same method would be adopted in 2047, but Lau believes “modern” clauses would be added during lease extension to reflect changes in society.

Edmond Yew Yat-ming, vice-chairman of the institute’s planning and development division, said this might include health and safety regulations regarding building maintenance and management.

Asked if the lease terms for industrial buildings could also be relaxed to accommodate creative industries, Lau said it’s an idea worth exploring as this would allow a more flexible usage of land, a scarce resource in Hong Kong.

In recent months, the lands and buildings departments have been cracking down on industrial building tenants which fall out of the “manufacturing” definition allowed in their respective land leases. But many complain that they simply had nowhere to go with skyrocketing rents.