Section 3
Land & Building
Above: the Carlsberg brewery at the Tai Po Industrial Estate; below: sites at the industrial estates are suitable for industrial processes that cannot be carried out in ordinary multi-storey factory buildings; right: Sha Tin New Town is on the Kowloon-Canton Railway and is developing into a light industrial area.
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General Policy
All land in Hong Kong is owned by the Crown. Land leases, including those for industrial land, are sold by the Government-usually by public auction. Some leases are, however, sold by tender or by private treaty grant. There is no discrimination between local residents and overseas nationals in holding titles to land. Overseas investors can buy leases of industrial land for the establishment of their own plants.
Crown land in the urban areas is normally leased for a period of 75 years, renewable for a further 75 years. Land in the New Territories is normally leased up to July, 1997.
Industrial Land Auctions
The basic principle in the sale of industrial land by auction is to achieve its optimum economic use. Building covenants attached to the sale conditions require sufficient expenditure to ensure the full utilisation of sites within the limits of their develop- ment potential.
Heavy demand for industrial land has led to high prices being realised at auctions in recent years. They are now unlikely to be less than about HK$8,000 (US$1,600) per square metre, but it is unusual for industrialists to buy land. Most prefer to buy or rent premises in buildings of between four and 22 storeys which are normally built on sites sold at auction. By this means, the cost of land as an element of the cost of factory floor area is greatly reduced. However, this type of multi-storey factory is mostly suitable for only light industries.
Payment for the land is normally required within one month of the purchase, and thereafter a nominal rental is levied. Other charges include a small fee for registration of the lease; and a stamp duty which rises to a maximum of 2.75 per cent of the sale price.
Industrial Estates
Recognising the need to broaden Hong Kong's industrial base and upgrade the technological level of industry, the Government has established indus- trial estates to provide land at a price that reflects the cost of formation and servicing for industrial processes which cannot be carried out in an ordinary multi-storey industrial building.
The industrial estates are built and managed by the Hong Kong Industrial Estates Corporation, a non- profit making autonomous body funded by Govern- ment loans and established by statute. Leases are offered to industrial users selected by defined criteria.
The primary ones are that they will make a significant contribution towards broadening Hong Kong's industrial base, and that their industrial processes cannot be carried out in an ordinary multi-storey industrial building. Priority in allocation of sites depends on, amongst others,
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