| FOR IMMEDIATE RELEASE | 29th March, 2004 |
The Hong Kong SAR Government Lands Department's claim for payment of land premium and interest in relation to the Cityplaza Four, Cityplaza Three and Cityplaza One office towers, as well as the Horizon Gardens residential scheme at Taikoo Shing, was upheld in an arbitration award announced in January 2001. In July 2003 the Court of Final Appeal refused to grant Swire Properties leave to appeal on a point of law against an element of the arbitration award. In accordance with agreed post-arbitration procedures, a fresh hearing was held before the arbitrator in February 2004 to determine valuation dates for the purpose of quantifying the amount of land premium on the office towers and the method of calculating interest.
The arbitrator has decided that the valuation dates for the purpose of calculating premium will be the dates on which occupation permits were issued for each of the office towers, and has decided that interest should be calculated at two-thirds of HIBID from those valuation dates. Under agreed procedures, Swire Properties and the Lands Department now have a period of three months in which to determine, by agreement, land premium figures for the Cityplaza office towers at the respective valuation dates. In the event that agreement cannot be reached, the amount of land premium will be determined by a panel of experts.
The amount of HK$4,500 million was accrued in the Swire Pacific group accounts as at 31st December 2000. Of this amount HK$250 million related to the Horizon Gardens residential scheme and HK$4,250 million related to the Cityplaza office towers.
Outstanding issues on Horizon Gardens have now been fully resolved, and the provision made previously in respect of this residential development is adequate.
In respect of the three Cityplaza office towers, whilst the valuation date, interest rate and period for calculating premium interest have now been determined, the quantum of Government's claim for premium remains unknown. However, the figure of HK$4,250 million accrued previously is now considered to be more than adequate to cover Swire Pacific's cash exposure. The eventual allocation of the cash payment between revaluation reserve, retained earnings and current year profit and loss account will only be determined once the quantum of premium has been determined.
Information relating to the three office towers
| Office Tower | Occupation Permit Dates | Excess GFA sq. ft. |
| Cityplaza 4 | December 1991 | 532,939 |
| Cityplaza 3 | March 1992 | 447,709 |
| Cityplaza 1 | August 1997 | 622,235 |
| © Copyright 1996-2024 irasia.com Ltd. All rights reserved. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |