The Urban Renewal Authority plans to introduce residential elements into its Kwun Tong Town Centre Development Areas 4 & 5 project, whose tender was canceled last week after the only bid from Sun Hung Kai Properties (0016) was rejected.
Managing director Ir Wai Chi-sing said in his blog that in line with the future development of the Kowloon East central business district, the authority decided to introduce residential housing into the project to enhance its attractiveness.
The residential area will be built above the hotel, office and shopping areas.
Wai said that if the site is granted in a depressed market, the project will suffer a serious financial loss and hurt the resources for future urban renewal projects.
Besides, the project involves the acquisition of more than 400 private homes and disposing of over 100 unauthorized structures, which was a huge expenditure.
The site of Kwun Tong Town Centre is strategically located adjacent to Kwun Tong MTR Station and Yue Man Square Public Transport Interchange and the URA said its role as a "town center" in terms of traffic, logistics and economic activity will not change.
The URA's revenue has been significantly reduced amid the housing market downturn.
Its To Kwa Wan Road/Wing Kwong Street development scheme was awarded last October at a price of HK$9,200 per square foot, 33 percent lower compared to the Hung Fook Street/Ngan Hon Street development project which was tendered in late 2021 at a price of HK$13,700 per sq ft.
URA estimates the tender for future projects will be under pressure as the acquisitions for the sites were done when property prices were high.
An aerial view of the site. SING TAO
