ENG-1978 — Page 149

HOUSING AND LAND

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response to a formal application, and in certain circumstances may be concluded by private treaty, subject to the approval of the Governor in Council.

Land for social purposes, such as schools and hospitals to be developed by private non-profit-making bodies, also is granted by private treaty. Land for public housing is allocated to the Housing Authority, and grants at a proportion of premium 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 development complying with the town planning requirements applicable to that area. 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 also is 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 legislation was enacted in 1973 to introduce a new Crown rent related to the rateable value of the property situated on the lot.

The premium for commercial and residential sites is usually payable soon after the sale. At the start of 1978, where the premium exceeded $10 million, it could be paid by a down payment of $1 million followed by 10 equal annual instalments bearing interest at 10 per cent per annum. However, in the middle of the year, the Governor in Council altered the payment terms for such sites, increasing the amount of the initial down payment to $5 million plus a further 20 per cent of the difference between this sum and the sale price.

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

The highlight of the year's transactions was undoubtedly in August when the govern- ment sold, by public auction, a non-industrial site on Queensway, Central District, for $585 million. This was a record price of just over $146,000 per square metre.

Seven prime sites in Tsim Sha Tsui East were also auctioned by the government with unit sale prices ranging between $51,500 per square metre and $90,000 per square metre. The highest sale price was $415 million paid in September for a lot of 6,062 square metres.

During 1978, four urban sites on Hong Kong Island and in Kowloon were granted to the Housing Authority for the Home Ownership Scheme. An additional urban site in Yau Tong was sold by tender to a private developer for development under the framework of the Home Ownership Scheme. Further areas of land previously used by the British Ministry of Defence, including 43 hectares at the former RAF Camp, Kai Tak, were handed back to the government.

In the New Territories, master development plans for Hong Lok Yuen Garden Estate and the Discovery Bay Resort project were approved by the Secretary for the