Hong Kong housing

‘HK$400 million rent exemption’ for 27 private Hong Kong sports clubs prompts call for lease review 

Green group urges rethink amid ‘social injustice’ over land use in a city notorious for its housing shortage and sky-high property prices 

PUBLISHED : Thursday, 22 February, 2018, 8:03am
UPDATED : Thursday, 22 February, 2018, 10:56am

Twenty-seven private sports clubs holding about 300 hectares (741 acres) of Hong Kong land were exempted by the government from paying almost HK$400 million (US$51.1 million) in rent in the past year, a study by a local environmental concern group has found. 

Announcing the findings on Wednesday, Green Sense called on authorities to require all private clubs to fully open their facilities to the public, or be charged rent at market rates to eliminate “social injustice”.

The ex gratia leasing conditions were stipulated under the private recreational leasing policy in 1979. 

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Under the policy, the government granted social groups and private clubs zero or nominal premiums to increase the provision of sports and recreational facilities for the public. 

In all, 66 sites – including the 27 in question – totalling about 400 hectares, were involved. 

In June 2014, the Home Affairs Bureau started its most recent review of the policy. It is expected to file its findings to the Legislative Council by this year. 

The call by Green Sense came as the government-appointed Task Force on Land Supply was considering developing private recreational sites to ease the city’s housing shortage amid skyrocketing property prices. 

“Most facilities in the 27 sites are open only to elite and rich club members, and are hardly accessible to the general public,” Roy Tam Hoi-bong, chief executive of Green Sense, said.

“This is unfair because the government in fact has been subsidising the rich,” Tam said.

The government in fact has been subsidising the rich
Roy Tam, Green Sense

At the centre of the controversy is a 170-hectare golf course in Fanling operated by the Hong Kong Golf Club, which also topped the list of sites under rental exemption compiled by Green Sense. 

In the year 2017/18, the golf club was charged an annual rent of HK$2.5 million – or HK$1.49 per square metre – by the government for the site. The rental was set at 3 per cent of actual annual market rates under the existing leasing conditions. 

Other private recreational premises on the Green Sense top 10 list of the largest cases of rental exemptions include Clearwater Bay Golf and Country Club, Hong Kong Football Club, Chinese Recreation Club, Craigengower Cricket Club, Hong Kong Cricket Club, Hong Kong Country Club, Hong Kong Golf Club’s course in Deep Water Bay, Yau Yat Chuen Garden City Club and Kowloon Cricket Club. 

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Annual rental exemption in 2017/18 for the nine sites ranged from HK$53.5 million to more than HK$16 million per club.

For all 27 private sites, more than HK$399 million in annual rents were waived, according to Green Sense.

The clubs sold expensive memberships and were only required to make their facilities available to five types of outside groups for at least 50 hours each month, according to a contract renewal condition introduced by the government in 2011. 

Tam said non-members were in general denied access to the facilities or offered time slots during their working hours. 

“The land that is leased at discounted prices in the name of public interest is not being used for the public,” Tam said.

The land that is leased at discounted prices in the name of public interest is not being used for the public
Roy Tam, Green Sense

Tam suggested that the government consider two general directions in its policy review. “Non-sports facilities operated by the clubs, such as restaurants and recreational centres, should be charged rental at market rates. And in the long run, all facilities should be fully open to the public.” 

James Lau Chi-wang, secretary of the Craigengower Cricket Club, said Green Sense was wrong to estimate that the club was exempted from an annual rent of more than HK$25.7 million for its 1.2-hectare site in Happy Valley. 

“You can’t simply take us as a commercial site. Our site can only be used for sports activities and no commercial element is allowed,” Lau said.  

He said the club made its facilities available for about 20 social groups for more than 10,000 hours in 2017. But Lau dismissed the idea of opening the site to all, citing concerns about misuse of property and facilities that would lead to higher maintenance costs.

In 2016, 74.1 per cent of the club’s total income of some HK$57.2 million were from membership entrance fees and monthly subscriptions of HK$350,000 and HK$720 per person respectively.

The club spent more than HK$41.4 million on operations and gained a surplus of nearly HK$14 million, according to its 2016 annual audit.

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Lau said the club might see a deficit in 2017 because it did not raise its membership fees. 

A spokeswoman of the Home Affairs Bureau said the government would recommend a raft of measures. This would ensure that the operation of private sports clubs could better meet the dual objectives of supporting sports development and optimising public resources. 

The Hong Kong Golf Club and the Clearwater Bay Golf and Country Club have not replied to inquiries by the Post.