Sun Hung Kai plans to increase supply of flats by 56 per cent at Yuen Long, Cheung Sha Wan residential projects
- Number of flats at its Yuen Long project will rise to 1,995 from 455
- Number of flats at its Cheung Sha Wan development will rise to 3,647 from 3,140
Sun Hung Kai Properties (SHKP) has filed an application with the Hong Kong government to increase the capacity of two residential projects by a combined 56 per cent, as the government struggles to increase land supply.
In its application to the Town Planning Board on Friday, SHKP said it plans to increase the number of flats in Yuen Long fourfold to 1,995 units, from 455 large flats, and reduce the average unit size to 484 square feet, from 2,000 sq ft previously.
Hong Kong’s largest developer by market cap also submitted a separate application to squeeze 16 per cent more flats at its joint venture development in Cheung Sha Wan, to 3,647 units from the originally planned 3,140. Here too the average unit size would be reduced to 520 sq ft from 605 sq ft.
The total cost of the two projects, offering a total of 5,602 units, could amount to more than HK$18 billion, according to surveyors.
The developer’s application comes a week after the government announced plans to take back private farmland covering 68 hectares (7.3 million square feet) in the northern New Territories to construct a new town.
The government has said that it would release only two plots yielding 980 units – down 27 per cent from the third quarter – for sale from October to December.
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“This is definitely an alternative for developers to increase supply by raising the number of flats to be built on their existing land,” said Vincent Cheung, managing director of Vincorn Consulting and Appraisal.
But traffic and environmental impact assessment would be a major consideration for the Town Planning Board before it gives its approval, he said.
“The infrastructure too should be able to support an increase in the number of residents. If the two projects are located near MTR stations and lines, they may have a higher chance,” he said.
A SHKP spokesman said that the Yuen Long project has been designed taking into account the needs of Hong Kong’s ageing population.
The 1,995-unit project will consist of eight residential towers ranging from six to 29 storeys, while some of the flats will be designed to be elderly friendly. It will also include elderly care services and facilities and a kindergarten.
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“The proposed project will serve as a pioneer project to showcase how the private sector can proactively promote ‘ageing-in-place’ at an estate-scale through a ‘multi-generational housing’ model,” SHKP said in a statement.
But Cheung said pricing would be a major consideration for buyers. “The developer needs to offer incentives in order to lure two or three different generations to live in the same development or live together,” he said.
Cheung estimates SHKP could be asked to pay a land premium of HK$4.7 billion for the conversion of farmland in Yuen Long.
Taking into account construction cost, the total investment could be more than HK$9 billion, he said.
Its project in Cheung Sha Wan, a joint venture with Kerry Properties and China Resources, could amount to HK$9.5 billion based on the construction cost of HK$5,000 per sq ft for the 1.9 million sq ft project.
