Hong Kong’s housing shortage to get better in few years, says Henderson boss

HONG KONG: Henderson Land Development believes Hong Kong's housing shortage will ease in the next few years since its landbank can provide 45,000 new units, which is equivalent to the total supply of new housing for four years.

Chairman Lee Shau-kee on June 1 said the company had replenished its landbank by acquiring old buildings, paying land premium levies and converting agricultural land into residential use.

By the end of last month, Henderson owned sites available for development with a total gross floor area of 32 million sq ft, enough for 45,000 units. Most of the sites would be developed into mass residential projects providing 500 to 600 sq ft flats.

"In the last three years, there were only about 10,000 new flats completed each year," Lee said. "My landbank is equivalent to the total supply for four years. The other developers also have plenty of landbank. The housing supply will continue to rise in the coming two to three years. We won't face a housing shortage."

According to the Transport and Housing Bureau, an average of 8,833 new flats were completed in each of the past three years.

Since the supply of mass residential housing will rise, Lee expects the upside potential for mass residential prices to be limited, compared with those of luxury residential.

The developer had been aggressive in acquiring old buildings in urban area a few years ago, he said.

"It has been easier for us to acquire the ownership of old buildings since the government lowered the threshold for compulsory sales to allow for redevelopment in March."

At present, Henderson had snapped up most of the ownership of 40 sites, which could provide a total gross floor area of eight million sq ft and 12,000 units.

The developer had also paid the land premium levy for converting up to four agricultural sites in the New Territories since last year. The sites could be developed into residential projects with a total gross floor area of four million sq ft and 6,000 units. The projects include two joint venture projects with New World Development in Wu Kai Sha and Yuen Long.

Lee believed that by disclosing its landbank, the company could provide the public and the government with a clearer picture of the housing supply in future. He said the group generated HK$30 billion (RM12.75 billion) after it sold stock when the Hang Seng Index reached 22,000 points in April.

"We will use the money to buy old buildings, agricultural sites and pay land premium levies," he said. "We will also buy Australian dollars and the shares of Henderson Land for investment."

He is optimistic on the property market outlook.