Henderson Land Development is finalising land premiums for a joint-venture residential project in Sheung Shui.
Negotiations for the premium have stretched over more than four years. Sources said the latest offer was about HK$128 million, representing an average of HK$400 per square foot. Previous offers from the Government were as high as HK$600 to HK$700 per square foot, one source said.
Surveyors said the substantial reduction was within market expectations considering the weak economic conditions.
They said the Government had been less aggressive in land premium discussions recently because of the weak market.
The Sheung Shui site, providing a total floor area of about 320,000 sq ft, was previously co-owned by Chi Cheung Investment and SAR-listed property investment company SEA Holdings.
The site had Town Planning Board approval to build two 38-storey residential towers with 500 units and 308 parking spaces. However, the developers were required to pay land premium for the conversion of land use from agricultural to residential.
Henderson acquired a 45 per cent interest in the site from debt-laden Chi Cheung in 1998. SEA Holdings has retained the remaining stake.