Sun Hung Kai Properties (SHKP) has reached agreement with the Government on an aggregate premium of HK$2.1 billion for seven projects in a show of confidence in the property market. It was the largest premium settlement on lease modifications this financial year. The deal was also believed to be the first collective premium charge for a basket of projects. Premium deals are usually closed on an individual project basis. The settlement will substantially raise the Government's land revenue. Exclusive of the SHKP deal, land revenue was only slightly more than HK$5 billion so far this financial year, well below the HK$27 billion target. The settlement covers seven sites which involved conversion of land use, including five residential developments in Yau Tin East Road, near the future West Railway Yuen Long Station, Yunnan Lane in Yau Ma Tei, Fu Tei in Tuen Mun, Olympic Station package three and Yeung Uk Road in Tsuen Wan. The other sites are a residential-commercial redevelopment in Cheung Sha Wan and an office-commercial development in Kwun Tong - Millennium City phase five. Analysts believe the Government made considerable concessions in negotiations with SHKP due to the prevailing market sentiment and the pressure to raise revenue. They estimated the projects could be developed into about 7.22 million square feet, and the HK$2.1 billion premium represented an average charge of about HK$290 per square foot. SHKP expected the sites would involve a investment of more than HK$20 billion and anticipated most of the developments would be completed within three years. The residential sites will supply about 9,500 units, while the office and commercial development of Millennium City phase five will provide 710,000 sq ft of office space and 570,000 sq ft of retail area. Thomas Kwok Ping-kwong, SHKP vice-chairman and managing director, said: 'The fact that we have reached consensus upon such a substantial sum for land premiums, and are prepared to invest over HK$20 billion in four years, is a clear demonstration of SHKP's faith in the local property market.' Mr Kwok said the likelihood of any further slide in the property market was minimal.