Property firm calls for metropolis staged premiums
An executive at property firm Colliers on Tuesday said the government should consider staged land premiums if it decides to pre-sell industrial and IT plots in the Northern Metropolis, the government's mega development project for the Northern New Territories.  On Monday, development chief Bernadette Linn said officials were checking whether the bidding process could be started before site completion was completed. This would mean investors being able to secure plots up to two years in advance.  But speaking on RTHK's Hong Kong Today programme, the head of valuation and advisory services at Colliers Hong Kong, Hannah Jeong, said plot bidders have to pay the full land premium once they win a land tender and this would affect the internal rate of return, or IRR, for a project with a long completion date. "Once the bidder wins the job... wins the land, then they need to pay the full premium within 28 days," Joeng said.  "That's a very, very short timeframe and that's a full commitment so that jeopardises a lot of IRR of investment because you pay Day One the full price of the land but you are only able to realise up to five years later when all the building has been done." Jeong was also asked whether pre-selling the land would mean the government receiving less money. "I don't think that will significantly lower the land price, there may be some inflation adjustment," she said.  Jeong said building a metropolis was a long-term project so she didn't think one or two years would have a major impact on the land price but there would be a reasonable discount for the bidders. The government plans to use the Northern Metropolis as a platform for integration with the Greater Bay Area and the national economy. In addition to providing much-needed residential housing, it also hopes to attract high-end industry to the zone such as information technology.