LEASE RENEWAL BRANCH
Government Land Agent:
J. P. POTTER, J.P., F.R.I.C.S.
T. D. PETTY, F.R.I.C.S.
7.15 This Branch was formed during the year to deal with the valuation problems involved with the renewal of the leases of some 5,000 lots and sections in New Kowloon, the leases of which expire in June 1973, together with the lesser number of renewable leases which will annually expire both in New Kowloon and elsewhere. All these leases were subject to a right of renewal at a fair and reasonable rental value of the ground as at the date of renewal. The position was complicated owing to the fact that a considerable number of the properties held on renewable leases had been sub-divided into thousands of undivided shares which make it extremely unlikely that all the owners would be able to get together in order to exercise their right of renewal. In order to solve this problem, proposals were formulated for legislation which would have the effect of renewing all these leases automatically by statute, and for amendment of the Crown Rent and Premium (Appointment) Ordinance so as to ensure that reassessed Crown Rent was equitably apportioned between the undivided share owners according to the value of the shop or flat that each share owner owned.
7.16 Two sections were employed continuously on preliminary work for the valuation of some 5,000 individual sites. This work was complicated by the fact that during the year there was a considerable increase in the value of land generally throughout the Colony. Towards the end of the year the prices being paid for land were influenced by the ready availability of public investment through flotations of shares of real estate companies forecasting dividends at fairly modest rates of around 7%. It became apparent that to assess rents based upon the level of value thus established would not necessarily result in a 'fair and reasonable rental value of the ground', and accordingly a recommendation was made to the Government that the values for the purposes of renewing the leases in New Kowloon expiring in 1973 should be pegged to the values obtaining at 1st July, 1972.
7.17 Regrants of 84 non-renewable leases were completed, involving premia of nearly $19 million (paid in a lump sum) and premium instalments of nearly $7 million. The renewal of 92 leases was
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