The Real Estate Developers Association (Reda) will challenge the Government's scrapping of serviced apartments from the land-use list because it tightens controls on development. Sources said the association would probably lodge a complaint with the Government on the guidelines issued by the Town Planning Board last month. The guidelines reversed the board's former decision in September to allow developers to proceed with serviced-apartment projects that were comparable in design to hotels. Sources said Reda felt the Government should not cancel 'serviced apartment' for the sake of 'technical difficulty' involved in enforcement. They said it should instead try to solve the difficulty. The removal of serviced apartment from the land-use list is causing discontent, especially from developers applying to build such properties on their sites. One project affected is a 16,502-square-foot site in King's Road, North Point. The site is owned by Lai Sun Group major shareholder Lim Por-yen, who had earlier stated the group intended to build a serviced apartment on the lot. Before the latest guidelines came into effect, the group did not need government approval to build serviced apartments because the site was under commercial land-use zoning. Under the guidelines, all serviced-apartment projects would be considered as hotels or residential projects. The Town Planning Board cited two reasons for the drastic change in its stance towards serviced-suite projects. It said the move was to avoid residential development in the name of serviced apartments in commercial and industrial areas or areas subject to environmental constraints. The board said the Government encountered difficulties in defining serviced apartments in enforceable legal terms. However, analysts said the real reason for the change stemmed from the Lands Department's decision to allow developers to sell serviced units on a strata-title basis. The move gave developers opportunities to cash in their investment in the short term by selling such flats to individuals. In the past, serviced apartments could not be sold unless as a whole block. The strata-title sale concession is fuelling concerns that quality of the 'services' provided by such properties could not be maintained under a multiple-ownership basis. This means a project designed as serviced apartments may eventually be equipped with substandard services, making them no different from conventional residential properties. Industry sources said it was unreasonable to remove serviced apartments as a land-use category merely because of technical problems in enforcement. 'Technical problems can be solved through discussions and [developers are] absolutely prepared to discuss [with the Government],' one source said. He said it was understood the Government was concerned that centralised services provided by serviced apartments could not be maintained after they were sold to individuals. The sudden deletion of serviced apartments from the land-use list was unfair, he said. The latest policy was especially unfair to some owners who did not need government approval to proceed with such projects on their lots under the old system, he said. With the policy, they had suddenly lost their rights. However, some developers had secured approval to build 7,162 serviced units in separate projects endorsed by the Town Planning Board between September and June. They will not be affected by the new policy. Among them are Sun Hung Kai Properties' redevelopment of the Swire bottling plant in Tsuen Wan and Cheung Kong (Holdings)' hotel-serviced apartment project next to Container Terminal 9 in Tsing Yi and its 'The Metropolis' development at the Kowloon-Canton Railway Hunghom Station.
