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HONG KONG: Small-scale urban and rural reform under way in Guangdong is expected to deliver development opportunities to Hong Kong's mid-sized players that find it difficult to compete on big development stages dominated by their larger rivals.
Forced out of Hong Kong by heavyweight developers, they will find new life up north as the Guangdong government seeks to accelerate the redevelopment of the province's old areas, according to Richard Ho, national real estate industry leader for financial advisory firm Deloitte's China office.
The reform plan aims to promote better use of land resources and increase the tempo of economic transformation in the province.
The plan known as "Three Old Reforms" — or the reform of old cities and towns, old factory plants, and old villages — envisages demolishing and redeveloping about 10 million square foot of old properties in five years, driving investment forecast at 10 billion yuan (RM 4.71 billion).
The plan covers properties across the entire province, including areas in Shenzhen and Zhuhai. Big players such as Sun Hung Kai Properties, KWG Property Holding, China Poly Group and China Resources Land, have been involved in a number of redevelopment projects under the policy, said Ho, but smaller developers and Hong Kong manufacturers in Guangdong also stand to benefit.
"The Guangdong government does not provide a list of old properties to be redeveloped. It is open to any investor or developer who can identify a project and then apply to the office in charge of the reform programme to redevelop it," Ho said.
A developer does not need to bid for a site through public auction, but if a proposal is approved, the developer will be required to pay a land premium to secure the right to convert the land site from its previous usage to a new use. The premiums will be calculated at a discount, according to the government, in order to encourage urban redevelopment. Developers will also be allowed higher plot ratios than the prevailing market levels, which means higher-density buildings.
Ho said Hong Kong industrialists who had factories now standing empty and idle in places such as Guangxi or the Yangtze River Delta region were also cheered by the plan. They showed great interest in redeveloping their premises to enhance their commercial value.
"I recently got a call from an industrialist who has an unused factory in Zhuhai. He is interested in the redevelopment potential of the site," Ho said.
Many Hong Kong manufacturers who were lured to China by low wage costs have since seen labour shortages push up costs.
They have also experienced growing labour unrest and may therefore consider closing their factories and making the sites available for redevelopment, Ho said. — South China Morning Post
Forced out of Hong Kong by heavyweight developers, they will find new life up north as the Guangdong government seeks to accelerate the redevelopment of the province's old areas, according to Richard Ho, national real estate industry leader for financial advisory firm Deloitte's China office.
The reform plan aims to promote better use of land resources and increase the tempo of economic transformation in the province.
The plan known as "Three Old Reforms" — or the reform of old cities and towns, old factory plants, and old villages — envisages demolishing and redeveloping about 10 million square foot of old properties in five years, driving investment forecast at 10 billion yuan (RM 4.71 billion).
The plan covers properties across the entire province, including areas in Shenzhen and Zhuhai. Big players such as Sun Hung Kai Properties, KWG Property Holding, China Poly Group and China Resources Land, have been involved in a number of redevelopment projects under the policy, said Ho, but smaller developers and Hong Kong manufacturers in Guangdong also stand to benefit.
"The Guangdong government does not provide a list of old properties to be redeveloped. It is open to any investor or developer who can identify a project and then apply to the office in charge of the reform programme to redevelop it," Ho said.
A developer does not need to bid for a site through public auction, but if a proposal is approved, the developer will be required to pay a land premium to secure the right to convert the land site from its previous usage to a new use. The premiums will be calculated at a discount, according to the government, in order to encourage urban redevelopment. Developers will also be allowed higher plot ratios than the prevailing market levels, which means higher-density buildings.
Ho said Hong Kong industrialists who had factories now standing empty and idle in places such as Guangxi or the Yangtze River Delta region were also cheered by the plan. They showed great interest in redeveloping their premises to enhance their commercial value.
"I recently got a call from an industrialist who has an unused factory in Zhuhai. He is interested in the redevelopment potential of the site," Ho said.
Many Hong Kong manufacturers who were lured to China by low wage costs have since seen labour shortages push up costs.
They have also experienced growing labour unrest and may therefore consider closing their factories and making the sites available for redevelopment, Ho said. — South China Morning Post
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