Hong Kong’s ‘big four’ developers stand to win big from government’s proposed Northern Metropolis
- The metropolis covering 300 sq km of area includes 600 hectares of farmland, wetland and brownfield sites partly held by big developers
- Sun Hung Kai Properties, CK Asset, Henderson Land and New World own a total of 106.3 million sq ft of farmland in designated hub: CGS-CIMB
While the plan covers an area of 300 sq km, the government will develop 600 hectares (1,480 acres) of land including farmland, wetland and brownfield sites, some of which is held by developers and private owners.
Sun Hung Kai Properties, CK Asset, Henderson Land and New World Development, the city’s top four by market value, together own a total of 106.3 million sq ft of farmland in the designated area, according to CGS-CIMB Securities.
“The four largest developers will stand to benefit the most among the local players from the new policies, due to their huge farmland reserves and extensive experience in developing farmland-converted mixed-use developments,” Raymond Cheng, the head of China and Hong Kong research at the brokerage, wrote in a report.
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While some of the farmland might be acquired under local laws by the government for public housing and infrastructure, developers will still have profit margins of about 20 to 30 per cent because of the extremely low cost of land, Cheng said.