bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Sandy Li

HKR International and Citic Pacific have agreed to pay a $1.65 billion land premium for their 2.06 million square foot Yi Pak development in Discovery Bay.

 Through their 50-50 joint venture - Hong Kong Resort - the companies ended years of negotiations with the Government with the concluded premium accord on Monday.

 Analysts said the settlement represented a 'reasonable price' of $798 per square foot.

 The amount is comparable with the $220 million, or $817 per square foot, Hong Kong Resort concluded with the Government in February for the 269,100 sq ft Discovery Bay phases nine and 10.

 HKR International said the premium payment would be financed from the venture's internal resources and bank borrowings.

 Ten per cent of the premium, $165 million, was paid and the balance will be handed over within three months.

 The premium negotiations were drawn-out, said Hong Kong Resort, due to the volatility of the property market.

 The 47-hectare Yi Pak site is located at the north-eastern end of Discovery Bay. The first of three phases, expected to be completed in 2002, will be offered for pre-sale in 2001.

 The proposed Yi Pak development will provide 1.87 million sq ft of residential space, involving 2,100 units, and a 195,500 sq ft commercial area.

 HKR said the premium did not take into account a proposed hotel with a gross floor area of 269,100 sq ft, which is also part of the township development.

 Analysts expect the investment cost of the development to be about $5.5 billion.

 Prudential-Bache Securities vice-president Raymond Ngai estimated the overall development cost, inclusive of infrastructure expenses, at $2,700 per square foot.

  Based on the units achieving between $4,000 per square foot and $4,500 per square foot when they are offered for pre-sale, he said the development could generate a gross profit of about $2.6 billion.

 Dresdner Kleinwort Benson's Terry Ip said the premium was in line with market expectations.

 He said the developers would have to invest a significant amount of capital in infrastructure such as roads and site formation, which might lead to a higher construction cost.

 HKR has already invested $500 million to build a tunnel, due to be opened early next year, linking Discovery Bay and northern Lantau.

PROPERTY 



Developers, Government finally agree on Yi Pak land premium