Another one bites the dust

Capital Estate Ltd., through its 99 per cent owned subsidiary, Sun Fat Investment and Industry Company Ltd, has had one of its parcels of land located in Coloane reclaimed by the Macau Government, due to the expiry of a temporary lease before any completion of works on the project, according to the company’s filing with the Hong Kong Stock Exchange yesterday.
The reclaimed land, covering an area of 10,154 square meters and located on Nossa Sra. de Ka Ho in Coloane, was supposed to have been the site for a steel-casting factory, however the lease expired in March, 2014, according to a dispatch published in the Official Gazette, signed by the Secretary for Transport and Public Works Raimundo Arrais do Rosário.
Sun Fat applied for the land lease in May of 2007, further submitting a construction development plan for the project later that year, in November.
Disappointment
The land has been idle since 2007, pending approval from the Macau Government to amend the leasehold of the land application, according to the filing.
In 2012, Sun Fat submitted a revised development plan, changing its original project – for semi-detached houses occupying an area of 16,700 squares metres – to the development of low-density luxury villas covering an area of 4,400 square metres. However, the Macau Government did not approve the change.
“The board of directors of the Company is disappointed with the notification and is seeking legal advice as to the possible steps that can be taken under the circumstances,” notes the filing.
Sun Fat is not entitled to any compensation according to the dispatch, however the company can submit a judicial appeal to the Court of Second Instance in Macau within 30 days of receiving the notification.
“In the eventuality that the Land is lost, [the loss] is not expected to cause a material negative impact to the daily operations or trading position of the Group,” notes the filing.
According to the unaudited consolidated interim results of the group for the six months ended 31 January, 2016, the carrying value of the land was HK$60 million (US$7.74million), representing less than five per cent of the total assets of the group.
Other similar such cases have also occurred regarding expired land concessions being reclaimed from Hong Kong developers by the Macau Government, including Kowloon Development Company and Moon Ocean Ltd., the developer of luxury residence La Scala, controlled by Joseph Lau Luen Hung.