SHKP applies to double the size of a Hong Kong residential project to boost supply of homes

The supply of new homes in Hong Kong may get a boost if an application by developer Sun Hung Kai Properties (SHKP) to almost double the number of flats at its proposed housing project in Sai Kung and to cut unit sizes by 39 per cent is approved.

SHKP said on Friday it has applied to the Town Planning Board to increase the gross floor area of the Shap Sze Heung site, near Sai Sa Road, to 5.8 million square feet from 4.83 million, allowing it to build 9,500 flats, up from an original 4,930.

“The average size of each unit will be cut to 610 square feet from 1,000 square feet gross,” according to the SHKP statement. “This would help to boost flat supply and also meet growing demand for small to medium-sized flats from young families.”

Hong Kong is one of the most expensive cities in the world to own a home, with a perennial shortage of property available but ever-increasing demand.

SHKP added that the extra 1 million square feet in floor area would require it to pay an additional land premium to the government. It originally paid HK$15.9 billion (US$2 billion) to convert the site from farmland to residential use in November 2017.

Thomas Lam, a senior director at Knight Frank, estimated that the Shap Sze Heung project could be worth HK$80 billion once developed. “We do not see lots of such large sites offered for tender by the government,” he said, noting that the revised plan would make the site equivalent to four or five plots at another major development project on the site of Hong Kong’s former airport at Kai Tak.

SHKP has previous experience of projects of almost 10,000 units, including the Yoho Town development in Yuen Long that began in 2000, and the City One development in the northern Sha Tin area that was a key part of the government’s plan to develop Sha Tin into a new town in 1979.