The Hong Kong government extended the lease for the US Consulate General in Central to 999 years – until 2949 – during the Tung Chee-hwa administration in 1999. The price tag was just HK$44 million, though the parcel of land may now be worth billions. The extension also removed sale restrictions on the site.
Leases of 999 years were granted by the government to some sites prior to 1901 – such as those in the Tai Koo Shing area. But the extension granted in 1999 was otherwise a rare exception.
According to documents published by shareholder rights activist David Webb, the original lease for the US consulate site was 75 years – from April 19, 1950, renewable for another 75 years, at a rent of HK$2,092 per year. There was also a sales restriction meaning the consulate had to return the land to the government should it move or close.
But there was a provision in the original lease that, with three months’ notice, the US and Hong Kong sides could reach a mutual agreement for the US side to purchase the freehold – an eternal ownership – at a fair value.
The US consulate says it has been at its current location since the late 1950s. The original lease was signed on April 14, 1960 by then-US consul general Julius Cecil Holmes. Although declassified documents showed the discussion for the lease started as early as 1949, it is uncertain as to why the lease was only signed eleven years later.
According to a deed document dated October 21, 1999, then-chief executive Tung Chee-hwa agreed that the US side could pay a HK$44 million premium and capitalised rent, as well as HK$140,000 in administration fees, to extend the lease to 999 years from 1950. Plus, the sale restriction was removed.
The site has an area of 61,719 square feet. Webb estimated that, even at a low-rise plot ratio of five, it would worth HK$7.71 billion now – 175 times the price the US consulate paid.
Webb also said that, upon inspection, the UK Consulate General only has a lease running up to June 30, 2047 – the expiry date of China’s promise that “the previous capitalist system and way of life shall remain unchanged for 50 years,” as stipulated in Hong Kong’s Basic Law.
“Given the ‘One Country, Two Systems’ model and the fact that mainland China only grants ‘Land Use Rights’ up to 70 years, it is probably also true that the USA has the longest leasehold property in all of China,” Webb wrote.