SDEV speaks on proposed redevelopment scheme for West Wing of Central Government Offices

Following is the transcript of remarks (English portion) by the Secretary for Development, Mrs Carrie Lam, at a media session after attending the opening ceremony of MIPIM Asia 2011 today (November 15) on the proposed redevelopment scheme for the West Wing of the Central Government Offices:

Reporter: Given that the Hong Kong Stock Exchange and the Securities and Futures Commission (SFC) will take up two-thirds of the place, would it actually lower the interest of developers as these spaces would not be rented out to other people? And, why do you want to use a two-envelope system for the land tender?

Secretary for Development: This land tender will be very unusual and very exceptional because of its particular circumstances and the need to respond fully to the public comments that we have received. Whether this sort of restriction and this nominated anchor tenant approach will affect the interest of developers, it is difficult to say. But there are two important facts. One is this is still a very prime site in Central, which normally will be sought after by developers. Secondly, this is a very good investment because we are not saying that the developer cannot collect market rent despite the nomination of anchor tenants. If the two organisations, i.e. SFC and Hong Kong Stock Exchange, agree to move in, they still have to pay market rental to the landlord. So it does not really affect the ability to generate profits. But it does mean that there will be more constraints in the development of this particular site.

As to why we have chosen to use a two-envelope system, this is also because we realised that there is public expectation that given the site's character and the vicinity, for example we have the Court of Final Appeal Building, St John's Cathedral, the Main Wing and the East Wing which we ourselves will preserve, so we attach a lot of importance to the design of the new building, the facade treatment, the use of material, the colour and so on. So we have decided that we would accord attention to the design elements. A two-envelope system would enable us to assess both the price offered by the developers as well as the design offered by the developers before we make up our mind on the award of this particular land tender.

(Please also refer to the Chinese portion of the transcript.)

Ends/Tuesday, November 15, 2011
Issued at HKT 18:13