The Hong Kong government's treasury income is another worry. A large-scale commercial land located in Mong Kok, Hong Kong, known as the "King of Commercial Land", was won by Sun Hung Kai Properties (SHKD) for about HK$4.7 billion, which is nearly 80% lower than the valuation of 22.8 billion yuan a year ago. "Shock Bomb". Analysts believe that the Hong Kong government's "low-price land sales" may become a trend, worrying about the impact on Hong Kong's treasury revenue. Once Hong Kong's fiscal reserves fall below the 12-month expenditure warning line, there is a greater chance of its sovereign rating being downgraded, and even impacting the linked exchange rate system.
The Hong Kong Lands Department announced on Wednesday (1st) that SHKP (0016) won the large-scale commercial land at the junction of Sai Sai Street and Argyle Street in Mong Kok, with a transaction price of HK$4.729 billion. Based on the maximum buildable floor area of the project of 1.52 million square feet, the floor price per square foot is only about 3,103 yuan, which is 16% lower than the market floor price of about 5.64 billion yuan and 3,700 yuan per square foot. It is even more expensive than industrial land in the New Territories flat.
The valuation of this commercial land has been falling since it was included in the land sale list. A year ago, when the land entered the land sale plan for this year, the highest valuation was 22.8 billion yuan, which dropped sharply to 4.7 billion yuan within a year, a depreciation of nearly 80%. This piece of land was valued at RMB 18.2 billion to RMB 22.8 billion in February last year, and RMB 7.32 billion to RMB 12.19 billion at the end of last year; by the time the tender was officially launched in February this year, the valuation had dropped to about RMB 5.64 billion to RMB 10.97 billion per square foot The estimated floor area is about 3,700 to 7,200 yuan.
The outside world is concerned, why is the bidding price of this commercial land far lower than expected? Will it have an impact on Hong Kong's property market and economy?
Analysis: Throwing a shock bomb on the property market, "selling land at a low price" may become a trend
Yan Baogang, the former head of Hong Kong's "Cable News" financial station, told this station on Thursday (2nd) that the changes in the valuation of the Xixi Street land could not keep up with the developer's bid. In the end, Xindi won the bid at an ultra-low price. The result was surprising. The property market dropped a "shock bomb", which reflected two important meanings.
Yan Baogang said: On the one hand, the officials of the Lands Department should understand what the rich man means, so the next land will be sold if it can be sold; ) are all invested in land, and they will not invest in land at high prices in the future. I believe that the land price will be lower than the wave, which will become a trend.
Yan Baogang pointed out that the developer’s bid is quite conservative, because the commercial land bids are serious, coupled with the decrease in foreign investment, the vacancy rate of Grade A commercial buildings is high; more importantly, the Hong Kong government will promote the "Lantau Tomorrow" and "Northern Metropolitan Area" projects, At that time, there will be a lot of land supply, and developers will become relatively cautious.
Analysis: Hong Kong's treasury income decreases, worrying that Hong Kong's sovereign rating will be downgraded
The outside world is concerned that the government's land sales revenue has decreased. How will it affect Hong Kong's treasury? Yan Baogang pointed out that land sales have always been an important source of income for the Hong Kong government. However, according to the current development of the property market, developers bid conservatively. It is believed that it will have an impact on the fiscal revenue of the Hong Kong government and may lower Hong Kong's sovereign credit rating.
Yan Baogang said: According to the current government's forecast, the fiscal reserve in the next three years will only fall to 12 months in government expenditure. If it falls below this level, it has actually reached the warning level. For example, Fitch (credit rating agency) Give Hong Kong AA-, but Fitch has indicated that the premise of AA- is that fiscal reserves have to be spent for 12 months. If it falls below this level, Hong Kong’s sovereign rating may be lowered. This is a reason for speculators to hit the Hong Kong dollar. It could be a challenge for the peg.
Land sales account for nearly 4 % of Hong Kong 's warehouse revenue1
According to Hong Kong's "Financial Budget", the government's land sales and land premiums are one of the important treasury revenues. For example, in the last fiscal year (2021/22), it accounted for about 1/4 of the income from land sales and land premiums last year. A total of about 141.1 billion yuan, accounting for 24% of the total budgeted revenue of 591.1 billion yuan for the year.
The budget for this year (2022/23) shows that the government’s land premium revenue is only 71.1 billion, a year-on-year decrease of 50%. This is a substantial reduction of 40% from the original budget of the Hong Kong government. The Hong Kong government pointed out that the main reason for the decrease in revenue was that the transaction price of some land was lower than expected, and some land bids ended.
The financial situation of the Hong Kong government has sounded the alarm in recent years. Last year, the exchange fund suffered a loss of HK$200 billion, the worst investment record. At the same time, fiscal reserves plummeted to a level of HK$800 billion, equivalent to only about 12 months of government expenditure.
Lands Department: the bid is the highest bidder
As for the commercial land in Mong Kok, which was won by Xindi at a low price of HK$4.7 billion, the Lands Department pointed out that the relevant bid was the highest bidder for the land. Based on the allowable development and requirements in the content, and with reference to the land and property transactions in the market and the latest market conditions, the reserve price is estimated, and the sale is only made after receiving an entry price that at least reaches the reserve price. The value of land is often affected by different factors, and developers will also consider bids based on their own circumstances and development strategies.
The Development Bureau also pointed out that the primary goal of the government's land promotion is to maintain a stable and continuous supply of private housing and commercial land. No matter whether the market is rising or falling, the goal of selling land remains unchanged, and it will continue to determine a piece of land based on professional judgment reserve price to ensure that the land is sold at a reasonable price.
15 civilians were killed near Sagaing and Jemmu townships
Sagaing Division Residents told RFA that 15 local residents were killed and another is missing near Sagaing Township and Myemu Township.
Locals told RFA that in the early morning of March 1, a military council force of nearly 100 men entered Tatai Village in Sagaing Township from the side of Myengmu Township and abducted 15 civilians. A resident of Myengmu, who did not want to be named for security reasons, said that 14 bodies were found near Nyongrin village on the side of Myengmu Township this morning on March 2nd.
"Tattai in Sagaing Township and Nyongrin Village in Myengmu Township are only separated by the mouth of the Mu River. The residents of Ta Tai Village also thought that the convoy could not come to them, so they could not avoid it. This morning, a group of five male corpses were found on the island of Nyaungrin village on the side of Mye Muang. In another place, a group of six male corpses and three female corpses were found. I saw a shot from behind."
14 of the victims were between the ages of 30 and 50, and the other one is dead or not. He said that it is still unknown whether he is still alive and the search is still on.
Similarly, another resident of Myengmu Township told RFA that a resident of Nyongrin Village in Myengmu Township was shot and killed when he encountered a Military Council column while riding a motorcycle today.
"The convoy is entering Nyangrin. He rode a motorcycle without knowing. The military council forces to stop it, I didn't stop, so I shot him."
On March 1, when the military council troops entered Ta Tai village, local defense force leader Kyaw Zo was captured and then mutilated and killed, according to local residents.
When RFA contacted Social Affairs Minister U Aye Hlaing, who is authorized to speak in Sagaing Region of the Military Council, about these incidents, he said that he was not aware of this incident yet.
People writing in support of the military council, on the Telegram social network, said that on March 1st, a battle broke out near Tartai village between the army and the PDF team, which was clearing the area in Sagaing Township. On March 2, another fight broke out near Nyongrin village in Myengmu Township, and 15 PDF members were arrested.
Locals said that those arrested and killed were civilians.
The dead were seen wearing civilian shirts and cloths, and some of the bodies had been shot in the head.
According to video footage and photos circulating on social media, the victims were seen wearing civilian clothes and cloths, and some of the bodies had been shot in the head.
According to the Association for the Assistance of Political Prisoners (AAPP) on March 1, 2023, there have been 3,073 deaths due to arrests and killings since the military coup.
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