Two property developers are in discussions with the Hong Kong government to pay lower-than-market premium for land parcels in the Northern Metropolis, a priority megaproject for the authorities to spur the city’s economic growth.

New World Development (NWD) and China Resources Land are finalising talks to pay between HK$1,500 and HK$1,600 per square foot for two plots in Yuen Long, for a total estimated at more than HK$2 billion (US$254.8 million), according to a source close to the matter.

The decision was made after the government – eager to speed up the development of the Northern Metropolis – took into consideration the languid condition of Hong Kong’s property market, the source said.

The two plots were part of a HK$10 billion venture between China Resources and NWD that was announced in December 2023, which would accommodate 1,800 homes on 720,000 sq ft of buildable gross area on a site measuring 150,000 sq ft. Construction is scheduled to commence this year, according to the developers.

New World Tower in Central. Photo: Jelly Tse

The premium of the Yuen Long site was reasonable, due to its mature development and convenience in terms of transport, surveyors said, adding that the rates of recent land exchanges would become reference points for ones in the future.

NWD’s shares closed 10.2 per cent higher on Thursday at HK$7.14 in Hong Kong, their biggest one-day percentage jump since March 3.