HOUSING AND LAND
103
than public housing) development in the urban areas is sold by public auction. Regular auctions are held by the government and a six-monthly provisional Crown land sales forecast is published twice a year. In the towns of the New Territories however, where much of the development land has to be resumed, a high proportion of development land is disposed of by tender to holders of land exchange entitlements,
Leases for certain special purposes, which have particular site requirements or other factors which would make a public auction inappropriate, are offered for sale by public tender. These special purposes include capital-intensive industries, which introduce higher technology and more technological skills into Hong Kong, that could not be appropriately housed in multi-storey buildings. These sales are initiated only in response to a formal application, and in certain circumstances may be concluded by private treaty, subject to the approval of the Governor in Council.
The bulk of industrial accommodation-in Hong Kong is provided by developers for onward sale or rent to indústrialists. Accordingly, to cater for specialist industrial users, a number of recent industrial lots sold in the New Territories incorporated lease conditions requiring the developer to design a percentage of the permissible floor area with heavy floor loading capabilities and high ceiling clearance. A number of lots also have been sold requiring the provision of small industrial units.
Land for community purposes, such as schools and hospitals to be developed by private non-profit-making bodies, is also granted at nil premium by private treaty. Land for public housing is allocated at nil premium to the Housing Authority, and grants at one-third full market value or acquisition costs, as appropriate, are also made to the Hong Kong Housing Society for the construction of low-rent housing.
It is also government policy, in certain areas, to modify old lease conditions which severely restrict the development permitted on a lot, in order to allow redevelopment com- plying with the applicable town planning requirements. A premium, equivalent to the difference in land value between the development permitted under the existing lease and that permissible under the new lease terms, is normally payable for any modification granted. A premium is also payable if a lot held on an expired lease is regranted to the former owners. Special arrangements have been introduced to deal with expired leases where the ownership is divided among a number of owners. In the case of the owners of property, the leases of which give them the option to renew the lease for a further term, special legisla- tion was enacted in 1973 to introduce a new Crown rent related to the rateable value of the property situated on the lot.
From mid-1978 through to 1979, buyers had the option, where the premium for a com- mercial or residential site exceeded $10 million, of making a down payment of $5 million or 20 per cent of the premium, whichever was the greater, followed by the balance in 10 equal annual instalments bearing interest at 10 per cent per annum. On December 1, 1979, however, this concession was withdrawn and the premium must now be paid in full within 30 days of the sale.
The premium for industrial sites, irrespective of the amount, can be paid either by four equal instalments over two years without interest, or by 10 per cent of the premium soon after the auction and the remaining 90 per cent by 10 equal annual instalments bearing interest at five per cent per annum.
Important Transactions
Important land transactions during 1979 included the auctioning by the government of three prime sites in Tsim Sha Tsui East. One of the sites covering 1,500 square metres sold