Yuexiu Property's recent announcement of accepting the government's land swap offer signifies the company's intention to redevelop its property projects in the Yau Tong area by relinquishing three sites on Tung Yuen Street and Chung Yiu Street and acquiring a new site, Plot No. 46 in Yau Tong.

For the new site, Yuexiu Property plans to invest approximately 1.346 billion Hong Kong dollars, developing five residential buildings, offering 1,393 residential units, along with 193 private car parking spaces and 22 electric motorcycle parking spaces. The premium payable for the transaction is approximately 2,040 Hong Kong dollars per square foot of permissible gross floor area, based on an estimated total permissible gross floor area of approximately 659,000 square feet.

Meanwhile, Yau Tong, gradually transforming from an industrial district to an emerging residential area, boasts significant development potential. Over the past few years, several industrial sites in the area have completed land premium payments, such as the Peninsula East in 2012, the Xi Tai project in 2017, and the Kin Hai Station development project in 2019. However, Yuexiu Property's premium payment of 2,040 Hong Kong dollars per square foot appears relatively low in comparison.

However, according to Zhang Qiaochu, Managing Director of Hengliang Consulting and Appraisal, the government considers various factors when assessing each land premium payment case, including the existing value of the land, its value after change of use, and the scale of development for the new use. Each case is unique, and the amount of the premium payment is influenced by multiple factors, making direct comparisons inappropriate.

For Yuexiu Property, this land swap action will enable the continued development of premium residential properties and generate synergies for its overall property portfolio. This initiative reflects the company's forward-looking and flexible development strategy, as well as its recognition of the potential value in the Yau Tong area.

As the project progresses, the company is poised to bring more development opportunities and residential choices to the local community. Simultaneously, this move is expected to bring long-term returns for the company's shareholders and inject new vitality into the development and transformation of the Yau Tong area. Yuexiu Property's project will promote economic and social development in the local community, infusing more energy and momentum into urban renewal and transformation.