Source: Hong Kong Government special administrative region
The Development Bureau (DEVB) announced today (December 29) that an open tender under a two-envelope approach will be launched tomorrow for the pilot area under large-scale land disposal in Hung Shui Kiu/Ha Tsuen New Development Area (HSK) in the Northern Metropolis (NM). The tender invitation will last for a period of about six months, closing on July 3, 2026 (Friday).
Large-scale land disposal is one of the innovative and diversified development approaches in the NM. Under this approach, the Government would identify sizeable parcels of land including residential and industry sites with commercial value, as well as public facility sites, for integrated development by successful tenderers. This aims to better leverage market forces to expedite the development of the NM.
This pilot area located in HSK has a total area of about 11 hectares, comprising three residential sites and three Enterprise and Technology Park (E&TP) sites (see Annex). Together, they can supply about 156 000 square metres of domestic floor area (i.e. about 3 120 flats, if calculated based on an average flat size of 50 square metres of gross floor area), and about 280 000 square metres of industry floor area.
The Secretary for Development, Ms Bernadette Linn, said, “As the first pilot area under large-scale land disposal undergoing tender in the NM, the HSK pilot area represents a significant step forward. The latest tender arrangements have incorporated market views, including the addition of one residential site, reducing the burden of road construction, allowing payment of land premium in stages, independent land leases for different lots, extension of building covenant to seven years, etc. These serve to increase the project’s financial attractiveness, facilitate investments from different background to form consortiums, and alleviate the cash flow pressure of developers.”
She continued, “The ‘two-envelope approach’ echoes the ‘industry-oriented’ theme of the NM. The weighting for land premium is only 30 per cent; the remaining 70 per cent is for non-premium proposal where the assessment criteria focus on the development of the E&TP sites, including whether strategic industries are developed, whether leading enterprises are introduced, development speed, investment scale, employment opportunities to be created, etc. Through this industry-oriented tender and a series of facilitation measures, we hope to attract high-quality enterprises to establish their presence in the HSK pilot area, promoting growth of the industry chains.”
Under the large-scale land disposal approach, the successful tenderer has to complete the site formation for the pilot area and construct some public facilities, including an open space, a pedestrian street and a footpath, handing them back to the Government upon completion. The successful tenderer will also have to complete the development of residential sites within the pilot area. Besides, the tenderer must tender for the development and operation of one E&TP site (i.e. HSK Town Lot No. 19), and can opt to develop and operate the other one or two E&TP sites (i.e. HSK Town Lot Nos. 23 and 24) at the same time. A tenderer willing to tender for and operate more industry sites will get higher marks. The purchasers of the E&TP sites winning the tender will be required to enter into service deeds with the Government, submit performance guarantees and arrange for bank bonds, ensuring the implementation of the non-premium proposals.
The assessment criteria will be detailed in the tender documents to be published tomorrow.
Flexible land premium payment arrangement
The successful tenderer can elect for paying 25 per cent of the land premium within 28 days from the notification of tender award, settling the remaining 75 per cent of land premium within three years from the notification of tender award with no interest charged during this period. Another flexible arrangement is allowing tenderers that has elected to pay land premium in stages to surrender land within the NM that the Government intends to resume, for offsetting at most 75 per cent of the land premium. The Lands Department will announce the list of eligible land tomorrow, among which a tenderer may propose in his tender surrendering the lots he owns. The Government will calculate the value of surrendered lots based on the applicable ex-gratia compensation rates for land resumption, for offsetting the land premium for the HSK pilot area.
Ms Linn said, “The two aforementioned arrangements related to land premium payment are measures aiming for removing barriers and restrictions as mentioned in this year’s Policy Address. They can reduce the cash flow pressure of enterprises in land development, thereby promoting their participation in the NM project.”
Land lease and other arrangements
Individual residential sites and E&TP sites will have independent land leases for execution, and can be held by different purchasers being members of the consortium submitting a bid. The building covenant in all the leases is seven years. Besides, if the two adjacent E&TP sites (i.e. HSK Town Lot Nos. 23 and 24) are awarded, the Government will consider accepting an application for lease modification from the purchaser for joint development, for a more holistic development and operation of the industry sites.
The tender documents will also specify the completion dates of infrastructures adjacent to the pilot area (such as roads, water supply / sewerage facilities), and provide that if the Government’s delay in construction of such infrastructures has caused a delay to the development of the pilot area, the Government may favourably consider extending the building covenant without requiring payment of additional premium.
The DEVB has already established a dedicated project supervision office chaired by the Permanent Secretary for Development (Planning & Lands), providing end-to-end facilitation service to private development projects in the NM in order to speed up their implementation. The HSK pilot area is no doubt a signature project.
Land sale documents for the lots including the Explanatory Statement, the Information Statement, the Forms of Tender, the Tender Notice, the Conditions of Sale and the sale plans will be made available tomorrow for public downloading from the Lands Department’s website (www.landsd.gov.hk). Hard copies of the sale plans may also be purchased at the Survey and Mapping Office, Lands Department, 6th Floor, North Point Government Offices, 333 Java Road, North Point, Hong Kong, from tomorrow until the close of the tender. Details of the tender will be gazetted tomorrow.