Developers must disclose concessions they have obtained
In response to the editorial ('Transparency the right first step on home sales', October 24), the Real Estate Developers Association wishes to set the record straight to ensure that your readers fully understand what developers bid and, ultimately, pay for at land auctions.
In regard to the so-called 'exempted areas' such as green features and amenities, you claimed developers do not pay land premium but charge buyers. We wish to highlight the fact that none of this space is, or ever has been, free of charge to developers. The availability of gross floor area (GFA) concessions is always taken into account in the premium that developers agree to pay to the government for both auctioned and lease modification sites.
In addition, on the question of transparency, developers are required to disclose in their sales brochures any concessions they may have obtained.
I quote the following regulation (Joint Practice Note 1 on Green and Innovative Buildings, jointly issued by Buildings Department, Lands Department and Planning Department): 'Where green and innovative features have been exempted from GFA calculation, such items and their use together with a schedule listing the corresponding areas so exempted must be clearly stated in the Sales Brochure. Where they are included in the saleable area of a property, such inclusion shall also be clearly stated in the Sales Brochure.'
We hope the above helps to further shed light on the ongoing public debate regarding GFA concessions.
Louis Loong, secretary general, The Real Estate Developers Association of Hong Kong
