TNAG-0657-FCO40-806-Town-planning-in-Hong-Kong-1977 — Page 158

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CONFIDENTIAL ##

For information

HILIL

H4K16 2657

NOTE FOR EXECUTIVE COUNCIL

OTE

XCCI(77)2

Copy No.2.8. of 40

HONG KONG REPORT COMPANY LIMITED

LOT NUMBER 385 IN DEMARCATION DISTRICT 352 DISCOVERY BAY, LANTAU

The Land Transaction

Lot Number 385 in Demarcation District Number 352, situated at Discovery Bay on Lantau Island, was granted to the Hong Kong Resort Company Limited on 10th September 1976 (memorandum XCC(76)47 dealt with the proposal). The grant was part of an exchange transaction, under which the Company surrendered over 6.5 million square feet of of land (then worth over $36 million) and agreed to pay a net premium of $61.5 million by ten annual instalments at 10% interest commencing on the date of grant. The land surrendered included numerous lots in the grant area and elsewhere on Lantau and 4 million square feet situated in the Tuen Mun layout and the proposed Yuen Long Industrial Estate. The premium calculation was based on a gross valuation of $100 million for the whole site. Crown rent amounting to $708, 000 is payable on 30th June annually. The building covenant requires $600 million to be spent on development phased over 10 years as follows:

$120 million within 4 years,

a further $180 million within 6 years,

a further $150 million within 8 years, and

a balance of $150 million within 10 years.

The conditions of exchange allow for low density development which at the maximum will provide just over 4 million square feet of residential resort accommodation and 1.5 million square feet of hotel accommodation.

The Mortgage

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In accordance with the conditions of grant, the grantee was permitted to mortgage the lot (as security for a loan of about $9-10 million) to Mr John Lok of John Lok and Partners, local building con- tractors. The sum of money so raised was used to pay the first instalment of premium. The mortgage enables the mortgagee, upon default by the mortgagor, to exercise a power of sale over the lot (or part of it) whereupon the full amount of premium outstanding (or the apportioned part of it) falls due to the Government.

C.S. 166

CONFIDENTIAL

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