The Collective Sales in Hong Kong for a lot is defined as:
(B) 80% of the undivided shares (Note 1) if:
(I) each of the units (Note 2) on the lot represents more than 10% of all the undivided shares in the lot; or
(II) each of the buildings erected on the lot was issued with an occupation permit at least 50 years before the Project Selection Date.

Note1： In April 2010, the Government relaxed the ordinance, under Land (Compulsory Sale for Redevelopment) (Specification of Lower Percentage) Notice (Cap. 545A of Laws of Hong Kong), lowering the compulsory sale application threshold from 90% to 80%. The prerequisites include: a lot and its individual units must represent more than 10% of all the undivided shares on the specified lot; if a lot is not located within an industrial zone, any industrial building on that lot must be at least 30 years old; or any lot in which all buildings are 50 years or older.

Note2： “Unit” means any premises that are described by reference to a specific number of undivided shares in a lot in any instrument registered in the Land Registry.

AsiaQuest International aims at arranging joint sale of the assembled property interests within about 6 months Note 1. The different stages of the Facilitation Project are as follows:

Stage 1
Stage 2 – about 6 months
Stage 3 – about 4 months (See Note 3)

Negotiation Signing of Intention Letter to reach the Joint Sale Threshold* Signing of Joint Sale Agreement, coordinate and monitor the progress and arrange the joint sales

Note3： Apart from joint sale by private negotiation, AsiaQuest may also consider joint sale of the assembled property interests by auction or tender, having regard to the ownership structure of the Site or the result of private negotiation and after obtaining the authorization of the stakeholders.

AsiaQuest will assist in setting the price and agreeing on the sharing ratios for distribution of the sale proceeds obtained from a successful joint sale. The stakeholders shall sign a Joint Sale Agreement confirming their agreement to sell their property interests jointly subject to the price and to share the sale proceeds among themselves in accordance with the agreed sharing ratios.

Property interests covered by the Joint Sale Agreement will be sold in an private negotiation to the purchaser. If the price is not met and upon the request of the stakeholders who have signed the Joint Sale Agreement, AsisQuest may consider auction/tender.

Here is a brief overview for us as to the different types of development projects out there and some advantages and disadvantages of each. Each development site is different, so this is a general overview and nothing is set in stone.

Repositioning and re-development
Repositioning and redevelopment projects can offer many advantages that new developments do not have. Every project is different, but here are some of the positive aspects of using an existing structure and developing it into something new and better.
Benefits:
• Existing building can save money on construction costs
• Can be much faster to renovate/develop
• Can have heritage and historical value and elements
• Unique features and story
• Community value add
• Generate income/taxes in idle buildings
• Increase land values of surrounding real estate
• Increased sales price
• Government policy support

Drawbacks:
• Approvals can be onerous and time consuming
• Structural upgrading can be very expensive
• Some areas of the building may not be useable under desired floor plans
• May need to add many elements to meet today’s building regulations which are much more strict than they were decades ago

Site Acquisition/Collective Sales
• In order to succeed in these projects, the development potential must be evaluated carefully and accurately, factoring location, development permissions, cost of development and local market conditions
• Partnering with experienced advisor will substantially increase the success rate of these projects as well as the maximum return on investment
Benefits:
• More rapid creation of profit
• Capital growth: a properly managed and timed project can increase the capital value of the properties

Drawbacks:
• Risk involved: higher multiples of revenue also signals a multiple of losses if the project fails since costs can sometimes be prohibitive and may vary from project to project
• Potential surprise costs: if feasibility study were not performed with due diligence, there will be a lack of contingency plan in place when potential surprise costs (eg land structure problem) occurs.