Hong Kong's second-richest man Lee Shau Kee is donating a parcel of land to build affordable housing for first-time home buyers - the first such act of philanthropy in the city.

The quid pro quo: The government has to waive the land premium to convert the land - currently zoned for farm use - to residential use. The sum could amount to hundreds of millions of Hong Kong dollars, based on the difference between prevailing prices for the two types of land.

Officials are mulling over his offer, said Mr Lee, 85, chairman of Henderson Land Development, on Monday.

The land, which measures over 100,000 sq ft, is in Fanling in the New Territories, and has a market value of between HK$200 million (S$33 million) and HK$300 million, said the tycoon.

It can yield over 1,000 flats of 300 sq ft each, priced at HK$1 million - the cost of construction, at HK$3,000 per square foot.

This is half the current market rate for flats in the area, said property surveyor Vincent Cheung of real estate broker Cushman and Wakefield.

Mr Lee's proposal is an astute public relations move in the city, where the Hong Kong dream has always been anchored by property ownership. But that has floated out of the reach of many, given record prices in recent years.

This, plus a widening income gap, is fuelling growing resentment against the property barons.

In April, Mr Li Ka Shing, Hong Kong's richest man, became the target of a class war campaign by unionists on behalf of port workers who complained of being under- paid. Mr Li's image was not helped by shenanigans such as exploiting a legal loophole to sell hotel rooms for residential use -later shot down by the government.

Mr Lee's proposal thus could go some way in helping to mollify Hong Kongers, by hopefully setting a precedent for other tycoons to follow, said Mr Cheung.

One of them, Mr Henry Cheng, son of Hong Kong's fourth-richest man Cheng Yu Tung, has indicated that his company New World Development is keen to follow suit.

The move is also likely to benefit Mr Lee's firm, as it could help speed up infrastructural development in the area. It holds 42 million sq ft of land in the New Territories as of last June.

Mr Lee on Monday said the site in Fanling was selected by the government from a list of seven, after considering factors such as infrastructure and pollution.

He owns the site, and not his company, which is listed. Therefore, the donation will not affect shareholders' interest, he said.

He argued that if the government charges the usual land premium, the price of the flats will soar beyond HK$1 million each.

His company will not be responsible for the construction, he added.

"We will just donate the site."