RESIDENTIAL PROPERTY | Staff Reporter, Hong Kong

Farmland conversion proposal may benefit major homebuilders

Developers must act quick to snap up deals to stay ahead.

Major homebuilders like Henderson land, Sun Hung Kai Properties, New World Development and CK Asset Holdings stand to benefit the most from the government proposal to convert New Territories farmland into residential developments, according to JLL’s latest Hong Kong Residential Sales Market Monitor. 

JLL reports that Sun Hung Kai Properties was said to have been fast to react having sealed a deal with the government to build 4,700 residential units in converted agricultural land at Shap Sze Heung, Sai Kung upon record-high payment of a land premium worth $15.9b.

Local developers with fewer to no agricultural land holdings were particularly active in the land bidding process in an effort to replenish their respective land banks in the previous year. Sino Land, for instance, won two sites in the public land sales market including a residential site in Cheung Sha Wan for a record-high $17.3b sold via government tender.

“Local developers turned active in the second half of last year, which shows they are optimistic on the market outlook and willing to pay aggressive prices in land bidding. With land prices at elevated levels, we expect local and mainland developers will continue to join hands in land bidding to increase the chances of winning and diversify investment risk,” said JLL Regional Director Capital Markets Henry Mok.

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