Today (June 6), the government announced additional financial support for the Urban Renewal Authority (URA) to improve its cash flow and ensure the orderly progress of ongoing redevelopment projects. Chief Executive, along with Executive Council, approved the symbolic lease of two plots of land at a price of HK$1,000 to the URA. These plots are located at Bailey Street in Hung Hom and in District 137 of Tseung Kwan O. The land will later need to be rezoned for residential use through statutory town planning procedures, with a lease term of 50 years.
The Secretary for Development, Bernadette Linn, stated that the URA is an important partner for the government in urban renewal, promoting redevelopment in a community-based manner over the years to avoid "toothpick apartments" and enhance urban livability. However, large-scale redevelopment involves significant acquisition costs, and combined with a sluggish property market in recent years, the URA faces a buy high, sell low dilemma (high acquisition prices but low tender returns or failed tenders), which affects its cash flow.
The URA has taken several measures to maintain financial health, including adjusting project timelines, seeking external financing, optimizing tender conditions, and controlling operational costs. However, according to the latest assessments, if the property market continues to slow and tender results do not meet expectations, the URA will require additional financial support to maintain redevelopment momentum, especially for acquisition efforts on ongoing projects.
The government has consistently supported the URA, and granting land at a symbolic price is one of the main measures. Linn pointed out that this land grant continues the policy direction of the past, assisting the URA in fulfilling its redevelopment mission while benefiting the community. The Bailey Street site can create a synergistic effect with nearby redevelopment projects in Kowloon City; the Tseung Kwan O site has been released due to priority adjustments in Housing Authority projects, allowing for timely and effective use of land resources.
The Bailey Street site has a net area of approximately 7,610 square meters, originally reserved for school use, but was reallocated for residential development after review by the Education Bureau. The site has a total plot ratio of 9, allowing for about 68,490 square meters of buildable floor area, which will provide facilities for government, institutions, or the community, improve pedestrian accessibility, and incorporate Hoi Sham Park to increase recreational space.
The Tseung Kwan O site has a net area of about 9.15 hectares, with a total plot ratio of 7.8, allowing for approximately 713,700 square meters of buildable floor area. This site was originally planned for public housing; however, after priority adjustments by the Housing Authority, the government assessed that there is sufficient supply of public housing land for the next decade, and the land grant will not affect the ten-year supply target. District 137 of Tseung Kwan O still has about 42 hectares of land that can be flexibly allocated for both public and private housing.
Additionally, the URA must review its operations and financial model with the government to ensure sustainable promotion of redevelopment amid market fluctuations, and submit specific recommendations to strengthen building rehabilitation by 2026 to reduce the urgency of redevelopment.
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