The Rail + Property Model - Hong Kong MTR s Experience Sharon Liu, Chief Town Planning Manager, MTR Stockholm December 10, 2013 MTR Corporation Limited 2013/12/10 Page 1
MTR s Key Challenge Funding high capital & maintenance costs low return on investment normally requires government subsidy 12/10/2013 2 MTR Corporation Limited 2013/12/10 Page 2
What is Rail + Property Model? Land Development Right Land Premium on Greenfield Basis Railway alone is unable to generate sufficient commercial returns property supplements Integrating rail and property promotes patronage to new lines Rail + Property as a railway funding model MTR Corporation Limited 2013/12/10 Page 3
Government s Transport and Planning Policies Railway as the transport backbone High density development around stations Property development integrated with depot/ station to support the railway Rail-based development to achieve sustainable living MTR Corporation Limited 2013/12/10 Page 4
Value Capture Process in R + P Model Tung Chung Station Development MTR agrees with Government on property development rights for each new rail extension MTR prepares master plans for development sites Land premium is negotiated with Government on a greenfield basis *, prior to tendering development sites Tender property packages awarded to developers through competitive bidding MTR oversees the design & construction Profit sharing with MTR Percentage of profits Assets in kind Kowloon Station Development Tseung Kwan O LOHAS Park Development *Greenfield basis = market value ignoring the presence of the railway MTR Corporation Limited 2013/12/10 Page 5
Success: Hong Kong has a world class railway.. Internationally recognised as one of the safest railways in the world Renowned for being modern, clean and reliable Consistently delivers 99.9% of journeys on time MTR Corporation Limited 2013/12/10 Page 6
and successfully develops integrated communities Sustainable communities integrating rail with property Develops New Towns/New Residential Areas Optimises land utilisation, improves living standards MTR Corporation Limited 2013/12/10 Page 7
Growing Network, Growing Businesses 2012 Underlying Profit Contribution Property Rental 22% 24% Railway Operation SEK 8.33bn 26% 4% 24% Outside HK Property Development Station Commercial MTR Corporation Limited 2013/12/10 Page 8
Competitive Fares without Operating Subsidy from Government 0.35 2010 CoMET and Nova Fare paid by passenger per passenger km (US$) 0.30 0.25 0.20 US$ 0.15 0.10 0.05 0.00 Eu Eu Eu NA Eu NA NA Eu Eu SA Eu As As SA Eu Eu MTR As SA As SA As As Eu SA As As As - Asian Metros NA - North American Eu - European Metros Metros SA - South American MTR Corporation Limited Metros 2013/12/10 Page 9
A Better Living Environment Region Carbon Dioxide Per Capita Emissions from Passenger Transport (Kg/day) Hong Kong 1.03 Tokyo 2.24 Singapore 2.73 London 2.87 46.4% of all franchised public transport trips are made on railway Low private car ownership (about 1 in 5 families) Hong Kong s transport sector has one of the lowest greenhouse gas emission levels The cost of journeys to the community is 5% of GNP, one of the very lowest in the developed world MTR Corporation Limited 2013/12/10 Page 10
Why is Rail + Property Successful? MTR Corporation Limited 2013/12/10 Page 11
People - Centric MTR Corporation Limited 2013/12/10 Page 12
Seamless Integration = Convenience MTR Corporation Limited 2013/12/10 Page 13
Examples of Rail + Property Developments Property development along railway lines MTR Corporation Limited 2013/12/10 Page 14
Kowloon Station Development MTR Corporation Limited 2013/12/10 Page 15
Kowloon Station Kowloon Station MTR Corporation Limited 2013/12/10 Page 16
Location Express Rail Link Terminal Artist s Impressions Airport Express & Tung Chung Line West Rail Line Kowloon Station Express Rail Link Terminal Austin Station Future West Kowloon Cultural District Pedestrian Footbridges Victoria Harbour Tsim Sha Tsui 17
Extension of Hong Kong s CBD West Kowloon Waterfront (1989) Kowloon Station Developments Construction commenced 18
Integrated Development Office & Hotel Residential Residential Residential Shopping Complex MTR Station 19
Integrated Development Residential Towers Hotel / International Commerce Centre Hotel / Serviced Apartment West Kowloon Cultural District Shopping complex MTR Station (Tung Chung Line/ Airport Express Line) In-town Check-in Facilities 20
Development Parameters Site Area 13.5 hectares Total GFA 1,090,026 sq.m. Domestic GFA (56%) 608,026 sq.m. Non-Domestic GFA (44%) Retail Office Serviced Apartment Hotel 482,000 sq.m. 82,750 sq.m. 231,778 sq.m. 72,472 sq.m. 95,000 sq.m. Plot Ratio 8.1 Note: Not including areas of station, public transport interchange and carpark 21
Tseung Kwan O New Town & Area 56
Po Lam Hang Hau Tseung Kwan O Tiu Keng Leng Yau Tong LOHAS Park Aerial View of Tseung Kwan O New Town
TKO Area 56 & Surrounding Context Park Central Future Residential Sites TKO Area 56 Bauhinia Garden The Site is surrounded by a number of high density residential buildings. A total of 13 future residential sites of lower building heights located to the south of the Site. Ocean Shore Junk Bay Ocean Shore Park Central Sheung Tak Estate Future Residential Sites TKO Area 56 The Grandiose Future Residential Sites Bauhinia Garden
MTR s Proposal in 2008 Hotel Hotel Site Area 39,990 m 2 163,130 m 2 Plot Ratio 4.08 Total GFA Residential Commercial Hotel Office 80,000 m 2 20,000 m 2 58,130 m 2 5,000 m 2 Residential MTR Station / Retail Residential
District Open Space & Landscape Deck designed and constructed by the proponent
Pedestrian Linkages connecting the site to the rest of new town via a comprehensive footbridge system
Civic Square 3,000m 2 of open space & Performance venue for public
Seamless connection between shopping mall and MTR station Page 30 PopCorn G/F Plan
Conclusion Sustainable financial model of urban railway construction and operation Creation of high quality communities by integrating transportation, working, living and leisure Railway as the backbone of both transport and urban development Building Hong Kong as a more vibrant, well connected and livable city MTR Corporation Limited 2013/12/10 Page 31
MTR Corporation Limited 2013/12/10 Page 32 caring for life s journeys