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The Chief Executive in Council has approved the granting of two prime development sites—one at Bailey Street in Hung Hom and another in Tseung Kwan O Area 137—to the Urban Renewal Authority (URA) at a nominal land premium of HK$1,000 each.
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The 50-year land leases, effective upon execution, are contingent on the sites being rezoned for residential use through statutory town planning procedures. This marks the first time the government has adopted such a model to support the URA’s financing needs.
Strengthening URA’s financial capacity
The Executive Council has set clear conditions for the land grants, requiring the URA to leverage the sites as assets to enhance its borrowing capacity and sustain urban redevelopment momentum.
The funding will support the acquisition of properties in six ongoing redevelopment projects between now and 2027-28.
Additionally, the URA must collaborate with the government to review and refine its operational and financial model by 2026, ensuring long-term sustainability regardless of market fluctuations.
The authority is also tasked with proposing measures to intensify building rehabilitation, extend the lifespan of aging buildings, and reduce urgent redevelopment demands.
The Bailey Street site, spanning 7,610 square meters, was originally reserved for school development but has been released following an Education Bureau review.
With a plot ratio of 9, the site can yield approximately 68,490 square meters of gross floor area, accommodating residential and "Government, Institution, or Community" facilities. The project will also integrate with the adjacent Hoi Sum Park to enhance public open space and improve district connectivity.
The larger Tseung Kwan O Area 137 site covers 9.15 hectares and, with a plot ratio of 7.8, can provide around 713,700 square meters of residential space.
Initially earmarked for public housing, the site’s allocation to the URA will not impact Hong Kong’s 10-year public housing supply target, as the Housing Authority has sufficient land reserves, said a government spokesman, adding that the government retains flexibility in Tseung Kwan O’s housing mix, with about 42 hectares still available for future public or private development based on market needs.
Addressing URA’s financial challenges
Secretary for Development Bernadette Linn Hon-ho highlighted that large-scale redevelopment projects entail substantial acquisition costs, and the URA has faced cash flow strains due to the "buy-high, sell-low" dilemma in a softening property market.
"Granting land at nominal premiums has long been a key government support measure for the URA," she said.
The Bailey Street site is expected to synergize with the URA’s Kowloon City redevelopment cluster, while the Tseung Kwan O site—deferred in the Housing Authority’s priority list—will now be utilized efficiently, Linn noted.
(Marco Lam)
