〈Asian Post, December 23, 2017〉The Hong Kong government is on track to post a record haul from selling land to housing and commercial developers in the current financial year to March 2018, bolstered by ever-rising prices in the world's most expensive urban centre.

For the eight months to November and with another quarter to go before the close of its financial year, the government received HK$90.68 billion from selling 12 residential and commercial land parcels, just HK$19 billion short of the record HK$109.5 billion achieved in 2016.

In the real world, that translates into jaw-dropping prices for land, which have added substantially to developers' costs, eroding their bottom lines. The result is a property industry charging ever-higher prices as builders pass their costs to homebuyers to preserve their profit margins.

"Under high land policy, our land is being used to build pricey apartments that are beyond the affordability of the general public," said Christopher Law, founding director of Oval Partnership, a Hong Kong architecture firm. "Units are shrinking to the size of shoe boxes. Experience tells us that the flats [being built] are for investors to speculate on and gamble for asset inflation, with no benefit to the city."

One way to cut this Gordian Knot of a problem would be to try a different approach in making land available for development, some builders and planners said. Instead of selling land to the highest bidder, award the plot based on criteria such as the overall economic impact, job creation opportunities, or cultural benefits to the community, they said.

"Although the Hong Kong government has generated huge land sale revenue, [the] money will be used up one day," Law said. "But a well-planned property development could offer long-term economic or cultural benefit to a city for the next 50 years."

〈China Daily, December 23, 2017〉The Hong Kong government is resolute in reversing the acute problem of inadequate housing supply in the special administrative region to enable people to live a happy life, said Chief Executive Carrie Lam Cheng Yuet-ngor.

Although housing is “the thorniest issue” among all livelihood matters in Hong Kong, her administration is determined to address it and the way out is to keep increasing land supply, she told Radio Television Hong Kong in a year-end interview.

Responding to public concern over the city’s escalating property prices, Lam said she had never promised to bring down homes prices as they are determined by multiple factors. What she’s working on is to reverse the momentum of short supply.

She said the shrinking average number of household members in Hong Kong has created a bigger demand for housing, and the previous-term government’s work on land supply had lagged behind the city’s development.

Apart from increasing land supply, the government will focus on various housing policies, Lam said. Referring to the skepticism over her “Starter Homes” scheme to aid the middle class, she said the government will keep helping those who want to own a home but are hindered by the runway property market.

The scheme, unveiled in Lam’s maiden Policy Address in October, targets young families of two or more whose monthly income does not exceed HK$68,000 and who had not been able to purchase any property before. For single-person households, the income limit is set at HK$34,000.

〈The Standard, December 22, 2017〉The Buildings Department approved 23 new projects in October, of which seven were on Hong Kong Island, seven in Kowloon and nine in the New Territories.

Of the approved building plans, 13 were for residential and commercial purposes, three for commercial developments, two for factory and industrial developments and five for community services.

The developments, with a gross floor area of 38,317 square meters, will provide 825 units for domestic use. The department also issued 11 occupation permits, seven for developments in the New Territories, three in Kowloon and one on Hong Kong Island.

Meanwhile, Metallurgical Corp of China (1618) unit, MCC Real Estate Group, launched its L' Aquatique residential project in Tsuen Wan.

The project will provide 198 flats, with sizes from 300 sellable square feet to 630 ssf. Pre-sales are expected in the first quarter of next year.

A four-bedroom flat at Azura, a Swire Properties (1972) project in Mid-Levels, sold for HK$48.5 million, or about HK$30,522 per ssf. Centaline Property said the 1,589-sq-ft apartment was acquired by the former owner in June 2011 for HK$40.8 million.

A car park at The Latitude development in San Po Kong sold for HK$3.8 million. Henderson Land (0012) has put onto the market 10 flats at its The Reach residential project in Yuen Long. The flats, with sizes of more than 770 sq ft, are priced from about HK$18,000 to HK$20,481 per ssf. The prices for the batch of flats will be raised early next month, said Thomas Lam Tat-man, general manager for sales at Henderson Land.

〈Business Post, December 21, 2017〉Singapore FORTUNE Reit on Tuesday evening said it has signed an agreement with an unnamed buyer to dispose of Provident Square in Hong Kong. The real estate investment trust manager plans to use the net proceeds from the sale for general corporate purpose and working capital, including repayment of an existing bank loan amounting to HK$1.1 billion.

The development comprises of the shopping centre and the sub-basement of the entire residential and commercial development known as Provident Centre. The property is to be sold for HK$2 billion (S$344 million), plus the amount of net current assets or minus the amount of net current liability of the holding company of the property.

The buyer was not named. The Reit manager said: "So far as the manager is aware, the purchaser is a company incorporated in the British Virgin Islands and is primarily engaged in property investment, and is a special purpose vehicle controlled by two property real estate funds."

The acquisition value represents a premium of about 88.5 per cent over the appraised value of HK$1.061 billion as at end-November 2017. The manager added: "The disposal is accretive to the net asset value of Fortune Reit. Further, the disposal is in line with the manager's strategy to improve operational efficiency and performance of Fortune Reit's portfolio and recycle capital for value creation to the unitholders."

Upon completion of the sale, Fortune Reit expects to record a gain of about HK$921 million from the disposal. However, the disposal will also lead to a slightly lower net property income and distribution for Fortune Reit, it said.

Based on the consolidated financial position of Fortune Reit as at June 30, 2017, the pro-forma gearing ratio of the Reit is anticipated to decrease from 28.4 per cent to 25.6 per cent after adjusting for the repayment of the bank loan.

The property has a gross rentable area of about 180,238 square feet. Its occupancy rate was 94 per cent as at June 30, 2017. The net property income of the property for the six months ended June 30, 2017 was HK$18.44 million - or about 2.5 per cent of the Reit's net property income for the first half of 2017. However, the holding company of the property made net losses after taxation of HK$12.3 million for fiscal 2016. The disposal is not required to

〈Asian Post, December 20, 2017〉Two of the mainland's largest property developers have acquired land in Shenzhen, also known as the country's "Silicon Valley", the Shenzhen Land and Real Estate Exchange Centre announced yesterday.

China Evergrande Group, which is based in Guangdong province and listed in Hong Kong, is the country's second-largest developer by sales volume.

It acquired 10,376 sq metres of land for 5.5 billion yuan (HK$6.5 billion), while Shenzhen-based China Vanke acquired a 19,227.53 sq metre plot for 3.1 billion yuan, according to the exchange centre.

The two pieces of land are in the city's southwestern Nan shan district. The area, which has a population of about 1 million people, is referred to as the "super headquarters" of Shenzhen Bay, a port of entry to China along the border with Hong Kong.

Evergrande and Vanke face similar restrictions on the plots of land they bought.Only about 30 per cent of the built-up area can be sold, while the rest cannot change hands within a period of 15 years, according to government regulations.

This month, Vanke also set up a fund in collaboration with Industrial and Commercial Bank of China, the nation's largest bank, to invest in distressed assets, a move that reflected a structural shift in asset trading away from new property developments.