The Government is set to work out a new list of sites that can be sold for the coming year, after the successful auction of two residential lots yesterday for $13.22 billion, which marked an end to the present financial year's land sales programme. The Sino-British Land Commission is expected to meet soon to determine future land sales, but only those between April 1 and June 30. Land sales after the July 1 handover will be prepared and decided by the Hong Kong Special Administrative Region government. Developers, who have been busy replenishing their land banks through land acquisitions in public auctions, tenders or private negotiations in the past year, are awaiting publication of the new programme. Despite repeated claims of land scarcity in the territory, there are a number of potential sites that could be ready for sale in the coming financial year. It has been revealed that eight former military sites now designated for residential development could be released for sale soon. These sites include, in Kowloon, the British Military Hospital, Blackdown Barracks and Kowloon Tsai Married Quarters. There are also New Territories sites available including Pearl Island Married Quarters, Perowne Barracks and Gordon Hard, Dills Corner Camp, Beas Stables Married Quarters and Burma Lines. The three sites in Kowloon are generally considered the most valuable and are suitable for luxury residential development. Other Crown plots likely to be put on the new sale list include a 941,850-square-foot site in Cheung Sha Wan that has been reserved for a wholesale market and office development, and a 86,100 sq ft hotel site in Ma On Shan. Both sites were originally scheduled for sale within the present financial year, but were withdrawn due to planning problems. A 215,280 sq ft residential site in the Sham Tseng reclamation area, near Tsuen Wan, was also plagued by planning troubles and withdrawn from this year's sale list. It is likely to be back on offer again. The other withdrawn site is a 79,675 sq ft residential site in Wan Hoi Street, Hunghom, the sale of which will be subject to the outcome of a prolonged court dispute between the Government and developers over controls on development densities in Kowloon. There are two hotel sites and a commercial site on the Hunghom Bay reclamation area. Their sales could also depend on the dispute's outcome. On the south side of Hong Kong Island, the 5.3 hectare Pendragon site in Stanley would probably be on the sale list, which could be seen as a reply to calls for releases of luxury residential sites to meet demand. A plot of Crown land in Chai Wan, next to Pamela Youde Nethersole Eastern Hospital, which could provide about 4,000 flats, may be put on sale as well. There is no doubt that the land sales programme will be dominated by residential sites in line with the Government's pledge to increase housing land supply. On the office side, a Tamar Basin site may go on sale in the new financial year. There are three reclaimed sites in the area available for development. Next to them is the Citic Tower project, which is under construction. Analysts believe developers will save reserves for the coming land sales and growing investment opportunities in property developments fuelled by the Government's drive to increase housing supply. Besides government land sales, developers will need to keep aside some funds to compete for property projects along the new airport railway. Forthcoming tenders include the phase two development in Kowloon Station and the phase three development in Olympic Station, Tai Kok Tsui. A number of private projects are also up for grabs. The large residential redevelopment of the Shiu Wing steel plant in Tseung Kwan O is being pursued by various developers. HKR International is still trying to get its Discovery Bay extension off the ground and is negotiating land premiums. With the promotion of the redevelopment of redundant industrial sites and urban renewal of rundown properties, more property projects were expected throughout the territory over the coming years, analysts said. The ambitious railway development strategy, including the airport railway, the MTR extension in Tseung Kwan O, West Rail and proposed rail system linking Ma On Shan to urban areas is likely to encourage more property developments. However, the Government has predicted that land sale revenues for the 1997-98 financial year will amount to $34.47 billion - 42 per cent less than the 1996-97 estimate of $60 billion. It said this was due to fewer private treaty grants and modifications of existing leases, exchanges and extensions. Analysts said the Government was always extremely conservative in its land-sale forecasts, so the final revenue total could be substantially higher, depending on the property market's performance. Land revenues would continue to be an essential source of income for the Government's running expenses. Analysts estimated that land disposal income usually accounted for more than 15 per cent of the Government's total revenues. Critics said the Government's high land-price policy, which was responsible for the rocketing home prices, had become part of life in the territory. They expected the Government to exercise extreme caution in increasing land releases without hitting the Government's revenues, through a 'balanced' supply over the years. Any serious drop in land prices could hit Government income, curtail plans for expansion, hurt the vested interest of property owners and developers, and affect investors' confidence in the territory, they said.
