Regarding the Government’s 2025/26 Land Sale Programme, Hannah Jeong, Head of Valuation & Advisory Services, CBRE Hong Kong:
The decision to delay the development of the two Multi-storey Buildings for Modern Industries (MSBs) is unavoidable given the sluggish land market and uncertain land conditions from the government. The MSBs are intended to accommodate brownfield operators, transitioning them from open fields to buildings, and are linked to the land resumption process for the North Metropolis development. While it is beneficial to study how market players will gain from this, concerns remain about potential delays in the land resumption process for the Northern Metropolis and the creation of a funding gap due to postponed land sales income. The government needs to consider minimizing operational risks to ensure the success of this initiative.
Regarding land sale revenue, among the 10 sites the government planned to sell in the 2024/25 financial year, only 4 were successfully sold, resulting in actual revenue of HK$13.5 billion, which is HK$19.5 billion lower than expected. For the 2025/26 financial year, the government has put 8 residential sites up for sale, with an estimated revenue of HK$21 billion.
Despite the government’s expectation of HK$21 billion in revenue for 2025/26, the current soft market conditions may result in lower-than-expected revenue. The most prime site, RBL 1204 located on Cape Road, Stanley (site area of 23,900 sq. ft.), has remained unsold since 2023. Previous market price estimates for this site ranged from HK$7.828 billion to HK$16.808 billion (AV: HK$16,300/sq. ft. to HK$35,000/sq. ft.). If the government tenders this site again in 2025, the valuation is likely to remain at the lower end. It is crucial for the government to not heavily rely on land sales revenue and to diversify other revenue streams moving forward.
Hannah Jeong, Head of Valuation & Advisory Services, CBRE Hong Kong 
Chester Leung, Senior Director, Valuation and Advisory Services, CBRE
Chester Leung, Senior Director, Valuation and Advisory Services, CBRE Hong Kong:
Amongst the eight residential sites for 2025/26, these sites are evenly located across Hong Kong with two in Hong Kong Island, two in Kowloon and four in the New Territories. Many of them are well supported by good transportation, infrastructure and community facilities. The sites are mostly small-and-medium size and will likely attract developers to submit tender proposals due to lower development threshold.
The Government mentioned to introduce new approach for in-situ land exchange approach. This can help alleviate the cash flow pressure of developers and investors. In turn, this can reduce the chance of tender failure. This approach is similar to Land Exchange Entitlements (Letters A/B) in 1960-80s for the development of New Town Planning. The factors impacting the policy effectiveness lie on how the Government assess the market values of current land sites, and the administration time the Government needs.