Hong Kong ‘could halt’ commercial land sales for second year over poor demand

Hong Kong authorities could suspend the sales of commercial sites for a second year due to a lack of demand, the development minister has said, while rejecting the notion that the government was pressured by developers to shelve the Lantau reclamation plan.

Secretary for Development Bernadette Linn Hon-ho made the prediction even as the city’s grade A office spaces saw a slight drop in vacancy rates between the second and third quarters.

Financial Secretary Paul Chan Mo-po announced in February that authorities would stop selling commercial land this year to allow the market to absorb the existing supply.

“It will be quite unlikely [for the government] to sell commercial sites [next year], as the financial secretary has instructed us to review the sales of commercial sites in the next few years. Currently, the commercial floor areas available are also abundant,” Linn told the Post in an exclusive interview.

“We should follow the policy … we will not earn any land premium even if we blindly put the commercial sites on the market as the tender would fail; it has to be demand driven.”

Figures from real estate consultancy firm CBRE Hong Kong showed vacancy rates for grade A office spaces fell from 17.4 per cent in the second quarter to 17.1 per cent in the third quarter.