Henderson Land targets bigger role in tackling Hong Kong's housing problem

[July 25, 2022]  By Clare Jim

HONG KONG (Reuters) - Henderson Land Development Co, one of Hong Kong's four major developers, plans to lend more land to the government to build transitional homes and is keen to help accelerate development of an area close to the Chinese border.

Martin Lee, co-chairman of Henderson - which has the largest farmland reserves among developers - said Hong Kong's pledge to build the "Northern Metropolis" is an "inevitable trend", as the financial hub integrates deeper with the Greater Bay Area (GBA).

"With the development opportunities in the Greater Bay Area, many locals will be attracted to live in the North West New Territories in the future," Lee told Reuters in an email interview.

The Hong Kong government unveiled plans for the Northern Metropolis last year, with an aim to provide homes for around 2.5 million people in remote districts close to the mainland border in a bid to ease a chronic housing shortage.

The development will be a stone's throw from the Greater Bay Area, a Chinese government scheme to link Hong Kong, Macau and nine cities in the southern Chinese province of Guangdong.
 

Affordable housing has been a priority for all of Hong Kong's leaders since the city returned to Chinese rule in 1997 but despite their efforts, many people still live in cramped flats in one of the world's most expensive property markets.

Hong Kong's new leader, John Lee, said he would be "pragmatic" in increasing land and housing supply, responding to Chinese President Xi Jinping's recent call to provide "a better life, a bigger flat" for Hong Kong people.

Beijing identified housing woes as a major factor behind discontent in Hong Kong, especially among the city's youth, that led to the pro-democracy, anti-government protests in 2019.

In recent years, developers have stepped up support for Hong Kong's housing policies as China urged corporations to do more for society.

Henderson owns the most land in the rural areas. It has applied to a government pilot scheme to build public housing on a farmland plot, and lent idle land to the government for building transitional housing - a temporary solution for people to improve their living conditions before they are allotted public housing.

Martin Lee, co-chairman of Henderson Land Development, poses for a picture at his office in Hong Kong, China, June 22, 2022. REUTERS/Lam Yik

"If the government intends to take back the land for the construction of public housing or for other public purposes, we will also cooperate," said Lee, who took over the property giant with his brother from father Lee Shau Kee in 2019.

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Echoing calls by other business leaders, Lee, 51, urged the government to reopen Hong Kong's borders with the mainland and ease international travel restrictions, which he said would help boost the city's property market.

Henderson aims to become the largest office landlord in the city's main financial district of Central as it invests $8 billion in a harbourfront site and completes the construction of its new tower, The Henderson, in 2023.

The Henderson, designed by Zaha Hadid Architects and in the form of a Bauhinia bud - the city flower of Hong Kong - recently confirmed a 20,000 square feet lease with U.S. private equity firm Carlyle Group, Lee told Reuters.

Carlyle declined to comment on the office lease or give details about its current Hong Kong office space. A person with knowledge said, however, the move will be an expansion for the U.S. firm.

Last year, British auction house Christie's became The Henderson's first anchor tenant, leasing 50,000 square feet..
 

"It shows that these multinational groups have cast a vote of confidence in the long-term future of Hong Kong as an international financial centre," said Lee, adding there is still strong demand for high-quality commercial buildings despite a slump in the office market amid the pandemic.

(This story corrects leased area by Christie's in second last paragraph)

(Reporting by Clare Jim; Additional reporting by Kane Wu; Editing by Anne Marie Roantree and Muralikumar Anantharaman)

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