5/4/2018-4

Land Revenue from land sales plan

On February 28, the Financial Secretary Chen Maobo published the “Budget Budget." The comprehensive surplus of the government in 2017/18 was far higher than expected, and was revised to 138 billion yuan, which exceeded the original estimate by 121.7 billion yuan. The difference was mainly due to higher land prices and stamp duty income than expected. The latest estimate of land price revenue was as high as 163.6 billion yuan. According to the “Budget" forecast, the land price revenue for fiscal year 2018/19 (the next fiscal year) will reach RMB 121 billion, which will allow the government to estimate that it will again have a consolidated revenue of RMB 46.6 billion in the next fiscal year.

According to the information of the Lands Department, the government will launch 27 residential units, 4 commercial/hotels and 1 additional industrial site in the next fiscal year on the land surface, covering a total of 32 sites, providing a total of 15,250 units, together with the railway property development project. , Urban Renewal Authority projects, and the modification of land leases or land exchanges, etc. It is expected that the number of residential units in the next fiscal year will reach 25,510 units, which is more than 42% of the target set by the government for private housing supply of about 18,000 units per year.

A number of high-quality urban areas debut

Among the 27 residential lands on the land surface, nine are of interest. They are the Kai Tak Development Area, a hilltop, a Wan Chai, two Kwun Tong Andersons, a Kennedy Town, and a section of Pak Shek Kok and Tai Po. A piece of Tuen Mun’s land. As for the four commercial/hotel sites, it also included a large-scale commercial project at the head of the Guangzhou-Shenzhen-Hong Kong High-speed Rail Terminal in West Kowloon and three sites in the Kai Tak Development Area. The remaining 1 additional industrial site is located in Anle Village, Fanling.

A detailed analysis of the location of the above-mentioned land revealed that all nine residential lands in the Kai Tak Development Area were located in the runway area of ​​the former Kai Tak Airport adjacent to the cruise terminal. Some of the sites will enjoy the view of opening up the Victoria Harbour and the quality will be better than that of the Kai Tak Development Area. The residential land is better. Last month, Henderson Land (00012) calculated the average floor price of residential land in the Kai Tak Development Area of ​​about RMB 15,000 from the HNA’s Hong Kong International Construction Investment (00687) for nearly RMB 16 billion, and nine residential lands in the Kai Tak Development Area. The area reached 10.2934 hectares, equivalent to 1.108 million baht. According to the Kai Tak Outline Zoning Plan, the plot ratio of these lands ranged from 5.5 to 7.1 times. Calculated at an average plot ratio of 6 times, the area under development can exceed 6.6 million baht, valued at close to 100 billion yuan.

In addition, there are three commercial/hotel sites in the Kai Tak Development Area, two of which are also located in the runway area and one near the future MTR station. The land area is 5.1476 hectares, or 554,000 hectares, and the plot ratio of the relevant land is From 4.5 to 7.5 times, the area that can be developed is about 2.5 million baht. In June last year, Nanfeng invested RMB 24.6 billion in commercial land in Kai Tak, which was calculated at a price of about RMB12,800. The value of the three sites was over RMB32 billion.

The most notable aspect of the next financial year is the large-scale commercial project at the Guangzhou-Shenzhen-Hong Kong High Speed ​​Rail Terminal in West Kowloon, with a buildable floor area of ​​more than 3.16 million sq. ft., which is larger than that of the adjacent Global Trade Plaza at Kowloon Station. According to the data from the Town Planning Board, the preliminary development plan for the high-speed rail station superstructure project involves the construction of three 21- to 23-storey office buildings with a total of 2.848 million baht and another 316,000 baht of commercial retail facilities. As the project enjoys the advantages of high-speed rail, Airport Express, Tung Chung and West Rail lines, and it is located in the downtown area of ​​Kowloon and enjoys the scenery of Kaiwei Victoria Harbour, it is bound to become a must for major developers in Hong Kong and the Mainland. Ground. Last year, the land price of the ground floor of the Murray Road car park in Central was higher than 50,000 yuan. It is believed that the floor price of the high-speed rail station will not be difficult to reach a level of 30,000 yuan or even higher, and the land value will reach 95 billion yuan.

In fact, in addition to the 13 lands mentioned above that are expected to generate more than 227 billion yuan in land revenue for the government in the land sales plan for the next financial year, there are 2 residential lands for Anderson land in Kwun Tong, each worth more than 10 billion yuan. yuan. At the same time, each of the sites at Man Fuk Road in the Peak, Pak Shek Kok in Tai Po and the Tuen Mun site has a valuation of several billion dollars. Therefore, it is conservatively estimated that even if half of the value of the land on the land sale table can be sold in the next fiscal year, I believe Sufficient to achieve the “budget" forecast for the fiscal year 120 billion yuan in land prices.

Land premium income continues strong

The above estimated land price income includes only land sold on land sales. In the next fiscal year, the railway property development project will launch 4 sites, including Yau Tong Ventilation Building, Wong Chuk Hang Station Phase 3, Ho Man Tin Station Phase II and The site tender for Tseung Kwan O Lohas Park City involved a total of 4250 flats. Among them, Wong Chuk Hang Station Phase III and Ho Man Tin Station Phase II project will be more prominent, and it is expected to bring about 20 to 30 billion yuan of land premium for the government. At the same time, the developer’s modification of the land lease or land exchange will also bring about land premium income for the government. With the continued advancement of projects such as the Northeast New Territories Development Area, it is believed that the attitude of developers to convert agricultural land into residential land in new development areas will tend to be positive.

All in all, the government’s difficulty in reaching its target of land revenue of RMB 120 billion in the next financial year should not be too serious. The government’s estimated consolidated revenue of RMB 46.6 billion in accordance with the Budget is expected to reach the target. If there is a commercial project at the Guangzhou-Shenzhen-Hong Kong High-speed Rail Terminal in West Kowloon Can meet the tender in the next fiscal year, the surplus will once again exceed the standard. However, it must be noted that land is a very precious resource for Hong Kong. It is unlikely that the Government will have a large number of high-quality land for sale in urban areas every year. Therefore, Chen Maobo uses about 40% of the surplus as returning wealth to the people while the rest is used to develop the economy and There are good reasons for investing in the future. With the ongoing high housing prices, the Government may consider using the surplus from land revenue for the sustainable development of subsidized sale and rental housing, reviewing the pricing and pricing mechanism for the subsidized sale of housing so as to better respond to people’s housing needs. Need to make the public more able to share the fruits of economic development.