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Presentation to The Hong Kong Institute of Architects

by Miss Annie Tam, JPDirector of Lands

To Supply Land for Private Development

24 June 2010

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Land AdministrationArticle 7 of the Basic Law:

The land and natural resources within the Hong Kong Special Administrative Region shall be State property. The Government of the Hong Kong Special Administrative Region shall be responsible for their management, use and development and for their lease or grant to individuals, legal persons or organizations for use and development. The revenues derived therefrom shall be exclusively at the disposal of the government of the Region.

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Total Area of the Hong Kong Special Administrative Region: 110 397 hectares

36 656 hectares(33%): managed

by the LandsDepartment

(excluding landallocated to other

governmentdepartments)

73 741 hectares(67%): privatedevelopments,country parks,land for public

bodies andinfrastructural

facilities

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- Land Sale- Land Grant (or Regrant)- Short Term Tenancy

LandsD acting as Government’s land agentLandsD acting in the landlord capacity

Unleased land (Government Land) Leased land (Private Land)

- Lease Modification (Waiver)

- Consent

- Surrender- Resumption- Re-entry

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Land Sale: 2010 - 2011 Application List

The 2010-11 Application List contains 62 sites, comprising 46 residential sites, 8 commercial/business sites and 8 “hotel only” sites

The 46 residential sites will produce about 9 000 flats

The 8 commercial/business sites will yield about 322 200 square metres of GFA (subject to survey)

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Government’s Initiated Sales of Sites in the Application List

Homantin site sold on 8 June 2010 at $10,900 million

Mt Nicholson site to be sold on 28 July 2010

Inverness Road, Kowloon Tong

Borrett Road, Mid-Levels West

Former Lingnan College site at Stubbs Road

Ex-Government Supplies Depot site at Oil Street, North Point

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Public Tender of Former Yuen Long Estate Site

The Government is prepared to sell by open tender the former Yuen Long Estate site of about 1.2 hectares near the West Rail Long Ping Station in Yuen Long for private residential purpose, and will increase the supply of small and medium-sized flats by specifying in the land sale conditions requirements in terms of the minimum number of flats and the range of size of such units

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Short Term Tenancy

A grant of land of short duration

Normally up to 7 years

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Private Treaty Grant

For specified purposes under exceptional circumstances

Supported by policy bureau

Meets the economic, social and community needs of Hong Kong

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Lease Modification

Lease is:

A contract between the Government acting as the landlord and the lessee

A lease includes terms and conditions

Premium payable to reflect the market value of the land

Lease can be changed subject to mutual consent and terms and conditions including premium reflecting the difference between the “before” value and the “after” value

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Lease Modification (Waiver) The lessee will have to submit an application for lease

modification if he/she wants to change the use of the land to purposes other than those specified in the lease.

LandsD, acting in the landlord capacity, may or may not approve the application at our sole discretion.

New conditions will be imposed in the letter of modification, but the tenure remains.

The applicant will have to pay a land premium representing the difference of land value before and after the lease modification.

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Granting of consent under the lease

The “consent” is provided for under some leases.

LandsD, as the landlord, is entitled to grant or not to grant such consent at its discretion at conditions including premium.

The grant of a consent for redevelopment is similar to the making of a fresh agreement.

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Land Exchange (Surrender and Regrant) A lessee may apply to surrender a land to LandsD; if the surrender

is accepted, it becomes Government land.

LandsD may agree to grant [regrant] the original land (or part of it) with or without additional Government land.

The regrant is a new grant.

The new grant contains new terms and conditions, normally 50 years.

The lessee has to pay a premium to reflect the difference between the before value of the land and the after value of the land.

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Revitalize Industrial Buildings – An example (1)

(a) a lease modification or a land exchange for the redevelopment of an industrial lot in a non-industrial zone; or

(b) a special waiver for conversion of an entire existing industrial building of not less than 15 years old situated in a zone designated for use as either “Industrial”, “Commercial” or “Other Specified Uses (Business)” according to the statutory town plans prepared pursuant to the Town Planning Ordinance.

A lot owner who wishes to apply during 1 April 2010 to 31 March 2013 for :

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Revitalize Industrial Buildings – An example (2)

Redevelopment

An application may be made for redevelopment of the lot concerned for non-industrial uses up to or less than the maximum permissible development intensity permitted under the relevant statutory town plan or, if there is no such limit under the statutory town plan, the Buildings Ordinance (“BO”).

An application will generally not be approved if the proposed development intensity for the redevelopment is less than 60% of the maximum permissible development intensity permitted under the relevant statutory town plans or (if applicable) the BO.

Any such application, if approved by LandsD, would be subject to such terms and conditions, including payment of a premium.

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Redevelopment (cont’d)

If the premium exceeds $20 million, a lot owner may opt for payment of 80% of the premium by annual installments, payable in arrears, over a period of up to five years subject to payment of interest at P + 2%.

In the event that a lot owner has opted for payment of the premium by installments, 20% of the premium shall be paid as a down payment, that is, 10% of the premium being payable upon acceptance of the binding basic terms offer and the remaining 10% on execution of the lease modification letter.

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Revitalize Industrial Buildings – An example (3)

Wholesale Conversion

An owner may apply for a special waiver at nil waiver fee for the change of use of the entire existing industrial building, for the lifetime of the existing building or until expiry or termination of the current lease, whichever is the earlier.

Approval for the grant of a special waiver may be subject to such terms, covenants and conditions as may be imposed.

During the validity period of the special waiver, no part of the building may be used for any uses other than those specified in the special waiver.

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Associated works arising from Land Sale/Land Grant/

Lease Modification/Land Exchange/Consent

Processing of building plans

Processing of landscaping proposal

Processing of CC application

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Processing of Building Plans Submissions – (1)

Building plans for developments on private lots are processed under the Centralized Processing of Building Plans managed by Buildings Department

- BD will pass building plans with the development schedules to LandsD

- BD considers the plans under Buildings Ordinance

- PlanD examines the plans having regard to the TPO

- LandsD will reply to the AP direct having regard to the lease conditions governing the lot

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Processing of Building Plans Submissions – (2)

Upon receipt of the plans from BD, DLO will attempt to give a response to the AP within 10 weeks.

When there is MLP requirement, GBP will only be processed after the approval/conditional acceptance of MLP.

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Processing of Building Plans Submissions – (3)

DLO will check the plans against the lease conditions, e.g. height, GFA, SC etc.

Complex cases may be referred to BC III.

BC III is chaired by DD/S with members coming from BD, TD, HyD, PlanD, ArchSD and Senior Landscape Architect.

AP may be invited to the meeting to present their cases.

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Processing of Building Plans Submissions – (4)

Specific issues

(1) Height of building

- Unless specified in the lease, height of a building counts from the lowest formation level (including stilts) to the highest point (main roof) of the building.

- Stilts are not preferred.

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Processing of Building Plans Submissions – (5)

(2) Number of storey

- Number of storey counts from the lowest formation level of a building.

- Unless specifically exempted under the lease, all floors including basements and carparking floor are number of storey accountable.

- Normal roof-top structures (e.g. stairhood, water tank, lift machine room) are not number of storey accountable if they are not excessively provided.

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Processing of Building Plans Submissions – (6)

(3) Accountability for GFA/SC

- Unless specifically exempted under the lease, all components of a building including projections and underground structures are GFA/SC accountable.

- Balconies, utility platforms, curtain walls and non-structural prefabricated walls which are exempted by BA are GFA/SC exemptible subject to lease modification, if applicable.

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Processing of Building Plans Submissions – (7)

(3) Accountability for GFA/SC (Continue)

- For GFA exemptions of plant rooms and similar facilities permitted under lease, LandsD are normally prepared to follow BA’s ruling.

- Staircases, lift shafts and lobbies exclusively serving GFA non-accountable areas such as carparking floor and/or mechanical floors, will be exempted for GFA (but not SC) if their design and disposition are acceptable.

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Processing of Building Plans Submissions – (8)

(4) Recreational facilities

- Unless specifically exempted under the lease, Clubhouses are GFA/SC accountable.

- To qualify for exemption, ancillary facilities (e.g. reception area, corridor, toilets) should be less than 50% of the usable area and the active facilities (e.g. squash court, swimming pool) areas should be larger than the passive facilities (e.g. reading room, sauna) areas.

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Landscaping Proposal (Combined Submission) Preserve trees, particularly old and valuable trees

Encourage assessment of impact of the development on existing trees

Early submission of conceptual landscaping proposal with general building plans or MLP

Felling of trees can be proceeded after approval of the conceptual proposal

Detailed proposal to be submitted and be approved before application for pre-sale consent

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Landscaping Proposal (Self-certification)

Registered Landscape Architect to certify completion of tree works (landscaping, tree removal, transplant and compensatory planting)

The certificate together with a report on conditions of the tree be submitted to DLO

BPU will inform within 14 days if an inspection is to be carried out

No notice from BPU means compliance

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Application for CCPoints to note

PN 8/2000 on ‘Checklist for Issue of CC’- to check compliance of positive covenants specified in

the lease

Not to encroach onto Government land, PN 4/2008

Performance pledge – 10 weeks to confirm issue of CC or provide reasons for rejection

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General Principles (1) Lease is a contract – virtually all lands in Hong Kong are held

as leasehold lands from the Government. When selling or granting leasehold interests, the Government does so in the capacity of a landlord.

Interpretation of a contract is the ascertainment of the meaning which the document would convey to a reasonable person having regard to all the background knowledge which would reasonably have been available for the parties in the situation in which they were at the time of a contract.

In disposing of a leasehold interest, the Government does not necessarily divest all interest in the land or sold all its development potential. Whatever rights or interests not disposed of in a lease remains the property of the Government.

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General Principles (2) The Government as a landlord is entitled to impose tighter

control than the minimum standards which the public are prepared to accept under the Town Planning provisions.

If the lessee wishes to build more, he has to seek the Government’s consent for the release of more development potential under the lease. The consent, if granted by the Government at discretion acting as the landlord, may take different forms e.g. lease modification, land exchange, waiver, consent letter or no objection letter. In the case of scarce resource such as land, the consent has to be paid for by way of premium of waiver fee.

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～ Thank You ～