New World Development (NWD) and mainland developer China Resources Land are finalising discussions with the Hong Kong government on a land premium for their Northern Metropolis megaproject, with a proposed price that is cheaper than rates secured in nearby areas recently.
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The price of the two involved sites, located in southern Yuen Long, was between HK$1,500 and HK$1,600 per square foot after the government – eager to speed up the development of the Northern Metropolis – took into consideration market conditions, according to a source close to the matter. The source was not specific about an amount, but it was estimated to be more than HK$2 billion (US$254.8 million).
In December 2023, China Resources Land agreed to invest in a plot of land owned by NWD as part of a HK$10 billion venture between the Hong Kong developer and state-controlled mainland conglomerate China Resources Group.
When completed, the project will include 1,800 residential units on a site of nearly 150,000 sq ft and a total buildable gross floor area of about 720,000 sq ft. Construction is scheduled to commence this year, according to the developers.
The land premium rate for NWD’s site in Yuen Long South is “reasonable”, due to its mature development and convenience in terms of transportation, according to surveyors, adding that the rates of recent land exchanges would become reference points for ones in the future. NWD’s shares rose 13 per cent to HK$7.13 at 10.20am on Thursday.
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In April, a consortium led by Sun Hung Kai Properties (SHKP) and Henderson Land agreed on a land premium rate of HK$1,682 per square foot for its 34B residential site in the Hung Shui Kiu/Ha Tsuen New Development Area, which will have 2,300 residential units after completion, according to the Development Bureau.