01 News｜The government intends to relax the threshold of forced auctions to "pull the nails" and accelerate the redevelopment of the old districts to benefit the most from Henderson Land

The housing problem in Hong Kong is severe. Chief Executive Carrie Lam will release the last "policy address" in his term next month. The land and housing issues have become the top priority.

According to the news, the government intends to amend the "Land (Compulsory Sale for Redevelopment) Ordinance," commonly known as the "Forced Auction Ordinance", to relax the threshold for forced auctions of old buildings 50 years of age or more, and to reduce the ownership of 80% of the property rights. Seventy-and-a-half percent, or even seventy percent, will not only help urban renewal, but also speed up the pace of acquisitions by developers, and "remove" the impedimental factors of the tenants.

Consortium's acquisition of old buildings has repeatedly encountered nails

The last time the government revised the "Forced Auction Ordinance" was in 2010, it prescribed lower application thresholds for compulsory sale of three types of lots, including buildings 50 years old or more, and the number of shares of each unit on the lot. For industrial buildings over 10% and over 30 years old, 90% ownership must be reduced to 80%. The amendment was promoted by the then Director of the Development Bureau, Carrie Lam.

According to the news, the government is studying to further reduce the threshold for applying for forced auction, from the current total of 80% of the ownership to about 75%, in order to speed up the pace of redevelopment of old buildings.

At present, when consortia acquire old buildings, they often encounter "one and a half" nail tenants, which makes the entire project fail to reach the threshold of forced auction, and the reconstruction has no time to postpone.

Among them, many of the ground shops in the old buildings are for commercial purposes, and their value is generally higher than that of the residential units upstairs, or the ownership of the ground shops is more than that of the residential units upstairs. Therefore, when purchasing old buildings, there are opportunities for Ground shop owners refused to move out or "should bargain", delaying the entire pace of reconstruction.

Henderson has the most old building redevelopment projects

In recent years, there has been a shortage of new land supply in urban areas. Many consortia have increased their land reserves through the acquisition of old buildings. The developer who has rebuilt the most old buildings is none other than Henderson Land.

According to the 2021 Interim Report of Henderson Land, the Group is making good progress in acquiring the ownership of old buildings in the urban area. Except for the projects that have already been sold, 80% or even all of the equity has been purchased, with a total floor area of ​​370 million square feet.

If the government decides to lower the threshold for compulsory auctions, it can be said to be "good news" for developers.

When receiving enquiries, Liu Guoxun, a member of the DAB Legislative Council, said that he had heard the "Policy Address" and had a good chance to announce that the threshold for forced auctions was relaxed to 70%. He pointed out that some old buildings currently have a small number of tenants. As long as one or two households refuse to purchase, it will be difficult. Reaching the 80% threshold, I believe that lowering the threshold will help speed up the redevelopment of old areas and renew the urban area, but emphasizes the need to comply with certain building age requirements and the original intent of the regulations.

According to the information, there are currently about 3,700 old buildings in Hong Kong that are 50 years old or more. Many of these buildings lack repairs and maintenance and present structural safety hazards.

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