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Bloomberg

In Hong Kong, where the four richest billionaires are in real estate, the Union Church is getting in on the act.
It is teaming up with Henderson Land Development to rebuild its squat, a two-storey brick church saved from rubble after the second world war, into a 22-floor tower with 17 floors of apartments.
Units of about 1,000 sqft in the Mid-Levels sell for as much as HK$37 million, according to Centaline Property Agency.
Land allocated to churches during British colonial rule has become prized real estate in the heart of the city.
A recent wave of church developments, similar to what has happened in New York, has at least three of them rebuilding sites, sparking debate about urban planning and heritage preservation, as well as whether religious institutions are exploiting land intended for non-profit use.
"Churches in Hong Kong do not have subsidies from the government and are often lacking in funding," said Peter Pun, a former director of the planning department.
"The best way for them is to make use of their nice, prime locations by building new high-rises and leasing the units."
Henderson is controlled by Lee Shau-kee, the city's second-wealthiest man. His company, known for buying out old blocks of flats with multiple owners for redevelopment, declined to comment on individual projects.
The Union Church, founded by a member of the London Missionary Society in 1844, would use the proceeds to fund the congregation, which would stay in the building, and double seating capacity, supplementing its current pledges and donations, said senior pastor Greg Anderson.
"The redevelopment will enable us to pass on to the next generation a church with ample space and without debt," Anderson said, adding that the church remained not-for-profit and any surplus from flats sales would be used for missions, outreach, staff and maintenance.
The Methodist International Church is set to complete a development by 2017 in Wan Chai. The church planned to use most of its new 22-floor tower and dedicate a few floors to the broader Methodist Church Hong Kong, said Howard Mellor, the 66-year-old reverend. The HK$400 million cost was to be raised from the 10,000 methodist followers in the city, he said.
"In Hong Kong, there's this sense it's a bit distasteful" to work with developers, said Mellor. "But there are good developers who do good work. I can see that a church might work with such a developer for the benefit of a wider community."
The Methodist Church Hong Kong redeveloped another site in Wan Chai into a high-rise building in 1998 with New World Development, the builder controlled by the family of Cheng Yu-tung, according to the developer's annual report. The church currently uses some of the floors, while the rest is leased out by New World.
The Anglican Church plans to build two towers of 18 floors and 11 floors as part of a redevelopment near Lan Kwai Fong. The land currently has historic buildings, including the 166-year-old bishop's house and a church that was used by Japanese soldiers during the second world war as a training school.
In the deal reached and approved by the government in 2011, the Anglican Church will preserve the heritage buildings at its own cost. The two new towers will be used for facilities including a church, kindergarten and a medical centre, according to a June 2011 government document.
A representative of the church was unavailable for comment on the development.
The Anglican Diocese's St John's Cathedral built in 1849 sits on the only freehold plot of land in the city in the shadow of Central's soaring office towers. Other land in Hong Kong is owned by the government and sold for long-term leases.
"Those land sites that they acquired in colonial times have become their biggest assets today," said Ng Cho-nam, a former member of the Antiquities Advisory Board, a government body advising on heritage issues in the city. While maximising the value of their land, churches should take heritage into consideration as they had close relationship with the city during its development as a former colony, he said.
Previously, the church partnered with Li Ka-shing's Cheung Kong (Holdings) in 1993 to build a residential complex on a site it was using as an orphanage, which was set to be relocated, in a suburban district. The church and its foundation earned about HK$1.1 billion from selling homes and parking spaces at the project, a legal document showed.
"By cooperating with churches, developers may not make as much money as they would by developing a whole office building in Central" because they needed to split the earnings, said Pun, who is now an honorary professor of urban planning at the University of Hong Kong. "But still, there's money to be made."
The China Congregational Church in 2012 redeveloped its site into a high-rise on Leighton Road in Causeway Bay. The church declined to comment when contacted for details.
In New York, churches are riding the surge in land and building prices to cash in on their properties, generating money to help repair structures built decades ago and support their missions.
In one example, about a dozen developers showed interest in buying development space from the Wadsworth Avenue Baptist Church in northern Manhattan.
In Hong Kong, the Mid-Levels, where the interdenominational Union Church is located, is home to luxury apartments popular with expatriates.
A 3,866 sqft unit at Cheung Kong's Kennedy Park at Central development, which is on the same road as the Union Church, sold for HK$188 million in 2012, according to Centaline data.
The high-rises "will have a visual impact on the neighbouring community" and increase traffic flow, said John Batten, a spokesman for the Central and Western Concern Group, which focuses on heritage protection and urban planning.
The government's push to ease home prices was leading other sites of non-profit entities - including schools and government quarters, which are usually bound by building restrictions - to be redesignated, said Batten, who opposes the redevelopment projects of both the Anglican Church and the Union Church.


Hong Kong churches reap big profits from land redevelopments

The Union Church is teaming up with Henderson to redevelop its Mid-Levels building. Photo: Bloomberg

Property

Hong Kong & China

In Hong Kong, where the four richest billionaires are in real estate, the Union Church is getting in on the act.
