Hong Kong developer NWD says it will ‘create shared value’, as it takes control of State Theatre Building site
- NWD took control of the site on Thursday and must pay holdout owners based on a Lands Tribunal reserve price of HK$4.77 billion or HK$12,468 per square foot
- The company has announced the set up of a team of local and international conservation consultants
The conservation of the 68-year-old State Theatre in Hong Kong’s North Point district will be the highlight of property company New World Development’s (NWD) redevelopment plan, according to its executive vice-chairman.
The developer, which is worth HK$99.7 billion (US$12.9 billion), was pursuing financial success as well as social benefits with the project, Adrian Cheng Chi-kong said. “On top of making money, we will create shared value – a connection between social progress and business success,” he said. The company took control of two residential buildings and the theatre, which was classified as a Grade 1 historical building in 2017, that come under the State Theatre Building under the city’s compulsory land acquisition law on Thursday.
The company has gradually built up ownership of the property by acquiring units from individual owners since 2015. Upon the acquisition of an 80 per cent stake in the site, it applied to the Lands Tribunal in 2018 for a compulsory sale to buy up the remaining share under the city’s compulsory land acquisition law. The law, which only applies to buildings that are more than 50 years old, is used to encourage urban renewal. NWD, which now owns 100 per cent of the site, must now compensate any holdout owners based on a Lands Tribunal reserve price of HK$4.77 billion or HK$12,468 per square foot.
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Hong Kong’s iconic State Theatre to be preserved under multibillion-dollar redevelopment plan
According to Lands Tribunal documents released in August when the compulsory auction was approved, the 36,200 sq ft site can yield a maximum gross floor area of 383,000 sq ft, and its redevelopment could yield about HK$9 billion at current market value. NWD said at the time that flats on the site could be sold for HK$27,000 per square foot, while car parking spaces could fetch HK$2.8 million each, according to the document.
A spokeswoman for the company, however, said the valuation of about HK$9 billion was based on the demolition of all structures – including the theatre – on the site. The theatre’s conservation would eat into the site’s redevelopment area, reducing its value, she said, adding that details of the development plan were not available at the moment. She also said the company had put a higher valuation to ensure that the affected owners of shops in the shopping centre and a few flat owners in the two residential buildings that had yet to sell their property received better compensation.
“As the conservation project will definitely be costly, the financial value of the redevelopment is not yet known. But it will contribute to the community,” said Leo Cheung, corporate development director of valuations and property management at Pruden Group.
