HONG KONG SAR - Media OutReach Newswire - 16 October 2024 - Response to the Policy Address 2024/25 by KK Chiu, International Director, Chief Executive, Greater China of Cushman & Wakefield:Farewell to subdivided units and optimize the living environment We are pleased to see that the government's taking proactive measures in housing supply and land policy to address the housing problem. The introduction of a rental system for subdivided units (SDUs), which will be renamed as Basic Housing Units, aims to improve the living conditions for low-income individuals and grassroots families, gradually alleviating the subdivided units' issue. However, the costs associated with renewing SDUs may reduce the supply, potentially leading to higher rents and increased financial burden for grassroots households. Housing supply and land policy The government has indicated that 3,000 hectares of developed land will be available for development over the next decade, which is a step toward stabilizing long-term housing supply. However, we anticipate that a part of the land will be in the Northern Metropolis. We recommend that the government closely monitor the infrastructure development timetable for the area, ensuring that supporting facilities keep pace with land development. In addition, we suggest that the government flexibly adjust the reserve price and terms of land sales based on market conditions to prevent excessive restrictions that could lead to failed bids, ultimately affecting long-term stability of housing supply. Welcome more housing supply and shorter waiting times The Policy Address reflects the government's commitment to increasing public housing supply, targeting 189,000 units over the next five years. We are also pleased to see the government will gradually build light public housing (LPH) and utilize undeveloped land for rapid housing solutions through Modular Integrated Construction (MiC). We recommend that the government continue to seek suitable public housing sites and expedite the redevelopment of aging housing estates to effectively allocate resources to those in greatest need. Response to the Policy Address 2024/2025 by John Siu, Managing Director, Hong Kong, Cushman & Wakefield:Office Market We are pleased to see the Government strengthening the "Nurture Talents" initiatives and pledging to encourage the market to convert commercial buildings by relaxing regulations on planning, land administration, and building plan approval. This will not only enhance the future supply of student hostels but also help alleviate the vacancy pressure of underutilized office buildings. We suggest that the Government consider relaxing the waiver application policy to facilitate the conversion of office or hotel buildings on commercial sites into student or talent hostels. This can minimize the costs and time required for owners/operators to apply for and maintain a hotel operation license, while allowing them to legally use the office building or hotel for residential purposes. Additionally, the Government may also consider providing subsidies or loans to owners/operators to reduce conversion costs, expediting project implementation and completion. Logistic Market We believe that reducing the liquor tax will help increase the sales of spirits, thereby supporting the demand for spirits' storage and warehouse spaces. According to current policies in Hong Kong, spirits must be stored in dangerous goods warehouses, which require licenses from multiple government departments. The license application process is strict and time-consuming, while most industrial and warehouse sites in Hong Kong have lease conditions that prohibit the storage of dangerous goods. If the industry's demand for spirits storage increases, the relevant government departments should introduce corresponding measures to facilitate the logistics industry in providing sufficient storage and logistics services legally for their spirits supplier clients. Reducing the liquor tax will help boost the consumption, catering and retail markets We believe that lowering the liquor tax will help spirits sellers and the bar industry reduce costs, thereby lowering retail prices and attracting more citizens and tourists to spend at bars. This, in turn, will increase foot traffic and revenue for bars. With the Government's vigorous efforts to revitalize the tourism industry, we believe this move will support the overall consumption, catering, and retail markets. Response to the Policy Address 2024/25 by Rosanna Tang, Executive Director, Head of Research, Hong Kong of Cushman & Wakefield: