At the time, the Plot Ratio of the Tregunter House site was 4.8 times. (The Plot Ratio of a site is calculated by dividing the total developable floor area by the site area).
Over the years, The Land Company has flogged off bits and pieces of Tregunter House, and finally disposed of its remaining units to The Great Eagle Company Ltd in July last
year.
The Great Eagle bought 83 units of Tregunter House from The Land Company for $HK339 million, followed by the purchase of another 53 units from Allied Properties Ltd for $HK232 million.
The Great Eagle now owns the complete complex, having bought 10 units from Miramar Hotel and Investment Company Ltd for $HK54 million and the remaining units from individuals.
The new owner proceeded to apply to the Government for approval to develop the site further.
The application was successful, and the Plot Ratio of the site was increased by more than 60 percent to 8 times.
This means that The Great Eagle can add about 400,000 extra square feet of floor area to the site which has so far been developed to a Gross Floor Area of slightly more than 388,000 square feet.
Tregunter House is presently valued at about $HK700 million, but the new proposals should boost the value of the property to more than $HK1 billion.
What has surprised many observers is that a company like The Land Company, known to be an experienced developer of property, has over-looked an opportunity to capitalise on what is obviously a very profitable development.
Allied Properties also missed out on the chance, and it, too, is a company recognised as an experienced property developer.
One explanation as to why both The Land Company and Allied Properties missed opportunities could be attributed to the Government's Circular Letter 58 which was sent out to architects in May 1970.
The essence of Circular Letter 58 was to restrict property density levels on developable sites over certain areas.
For instance, a site of more than 40,000 square feet would be regarded as large and would be subject to additional regulations on the standard density levels.
Sites of 100,000 square feet and over, which includes the
Tregunter House site, would only be a allowed a density of 40 percent of the standard density level.
It appears that it became standard practice for architects and planners to regard Circular Letter 58 as a rule covering all new sites.
However, some bright spark at The Great Eagle discov- ered that the regulations could not be statutorily enforced on sites which were covered by unrestricted leases.
The Tregunter House site is covered by an unrestricted lease, because when it was built, the technology to build towering high-rise buildings did not exist.
Consequently, there was no need to restrict the height of the development.
Thus, The Great Eagle was able to apply to the Govern- ment to increase the Plot Ratio of Tregunter House.
Perhaps The Land Company had not done its homework properly, or perhaps the planners had felt bound by Circular Letter 58 and did not think to question it.
Whatever the reasons, the management of The Land Company may have to explain them to the shareholders of the company, if the shareholders raise the question as to why the Tregunter House site was not developed to its full potential.
Developing the site to only five-eighths of the possible Gross Floor Area could be viewed, it has been said, as an error worthy only of an incompetent management.
On the other hand, perhaps the management of The Land Company did not have its eye on the profits, but instead was more concerned with the residents' need for space and somewhere to walk the dog.
The Land Company's latest purchase was Hang Chong Building in Central.
With the land already acquired adjoining Hang Chong Building, the Ice House Street site now comprises at least 500,000 square feet.
What plans The Land Company has for the site are not yet known, but when completed, the development could be one of the largest in Central.
Presumably, shareholders will be hoping that The Land Company does not make the same mistake twice by under- estimating the potential developable area of the site, and hoping that the Ice House Street site becomes The Land Company's new 'piece de residence'.
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