Hong Kong adds security law clauses to land sales, property stocks drop (updated)

Sun Hung Kai Properties

13/02/2023 16:49

(Add government's comment)
       HONG KONG, Feb 13 (Reuters) - 
    Hong Kong's Lands Department has added national security
clauses to all land sale and short-term lease tender documents
in the Asian financial hub, the Development Bureau said on
Monday, confirming an earlier media report that had sent
property stocks tumbling.
  
     The move empowers the government to disqualify bids and
suspend short-term leases due to national security reasons, 
Hong Kong Economic Times report on Monday said, adding the terms
had been included in the latest land sales.
    "Safeguarding national security is the shared responsibility
by the entire Hong Kong society," the Development Bureau told
Reuters, confirming the media report.
        Hong Kong Economic Times reported that Hong Kong
authorities began to include applicable provisions of the
National Security Law in the terms of land sales and short-term
leases in the Asia financial hub.
    That sent Hong Kong property stocks index  .HSNP  down as
much as 4.9% to the lowest in six weeks, compared to a 0.1% slip
in the benchmark Hang Seng Index  .HSI .
    "It suggests that developers will be even more cautious in
putting a bid in land sale," said Steven Leung, a sales director
at UOB Kay Hian.
    Hong Kong property groups CK Asset  1113.HK , Hang Lung
Properties  0101.HK , Sun Hung Kai Properties  0016.HK ,
Henderson Land  0012.HK  and New World Development  0017.HK 
fell between 0.8% and 6.7% 
    In January, the Lands Department said all four tenders
received for the sale of a residential site in Stanley on Hong
Kong Island had been rejected as their tendered premiums did not
meet the government's reserve price for the site. 
    However, the first land sale project in the Kai Tak area
that included the relevant terms attracted six bidders and the
site was successfully sold by the end of 2022, said the bureau,
which its responsibility includes land administration,
infrastructure development, urban planning and renewal.
    "For law-abiding bidders, the relevant terms should not
affect their willingness to bid, and we are not worried that the
terms will affect the government's push for land," the bureau
added. 
    Private home prices in the city, one of the most
unaffordable territories in the world, fell 15.6% in 2022 in the
first annual drop since 2008.
    The National Security Law, which punishes subversion,
collusion with foreign forces and terrorism with up to life in
prison, was imposed by Beijing on the former British colony in
2020.
    Western governments and rights groups have criticised the
law for causing the deterioration of freedoms and the rule of
law. Hong Kong and Chinese authorities say it is necessary to
restore stability after anti-government protests in 2019.
 (Reporting by Jessie Pang and Donny Kwok; Editing by Christian
Schmollinger and Josie Kao)
 ((donny.kwok@thomsonreuters.com))