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HKR eyes old buildings for redevelopment

HONG KONG: HKR International, the developer of Discovery Bay, is turning its attention to the redevelopment of old buildings as it cannot afford to bid for large allotments in government auctions.

The medium-sized developer, claiming it is being forced out by heavyweight players in land auctions, is exploring different opportunities to keep the company growing.

Assembling small properties and packaging them into a decent-sized site for redevelopment could be a new way of life for the company, managing director Victor Cha Mou-zing said.

"We will explore every opportunity [to increase our land bank]," he said adding that HKR had bought 100 units this year in preparation for potential redevelopment.

Cha said the change in strategy had been prompted by the difficulties in land bank replenishment. "Some of the big projects, in terms of investment amount, are out of our reach."

He had repeatedly urged the government to offer more small sites so as to give more development chances to smaller players in the industry.

"There is a Chinese proverb that says big chickens do not peck at small seeds. But nowadays even dinosaurs peck at small seeds," said Cha, implying that big developers are keen on grabbing big and small sites for development.

Other investment opportunities include the possibility of a project on the mainland similar to the successful Discovery Bay development.

Meanwhile, Chan Chi-ming, general manager of Hong Kong Resort, an HKR International subsidiary, urged the government to enhance transparency over the land application list system under which developers trigger land auctions.

"The government has not enhanced transparency of the mechanism for determining the market value of sites on application lists. It should disclose the reserve price," Chan said.

Under the system, developers can have a site released from the government's application list by making a bid of no less than 80 per cent of an undisclosed reserve price. They must then compete with other developers in an auction for the site. - South China Morning Post

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