URA eyes lower-cost projects

Local | Stella Wong 19 Aug 2019

The Urban Renewal Authority is formulating redevelopment plans in advance, so it may make acquisitions at lower prices when property prices drop, URA managing director Wai Chi-sing said.

Despite current market uncertainties, Wai said the authority will continue its redevelopment programs and make plans in advance, he wrote in his blog.

He said the authority is now building a "planning pool," that is a list of projects on which it is conducting advance planning and feasibility studies for potential redevelopment. The pool includes projects with acquisition costs estimated to be HK$100 billion, Wai said.

The planning is to ensure the projects can be launched at appropriate times in accordance with fluctuations in the property market. This way, the cost of acquiring properties can be lowered.

"When there is a fall in property prices, the authority can even seize the chance and choose to launch appropriate projects from the pool," Wai said.

This can lower the negative impact brought by the economic situation and the property market fluctuation, and make good use of the authority's financial resources, he added.

Earlier this month, Wai said the authority issued acquisition offers to flat owners in the Queen's Road West/In Ku Lane Development Scheme for a record HK$24,051 per square foot in sellable area - breaking the previous record of HK$23,568 in the Sung Hing Lane/Kwai Heung Street Development Project last year.

"This is mainly because property prices have been rising continuously. Increases in property prices in the district where the urban renewal project is located bring a high acquisition cost to the authority," Wai wrote.

He said the government and some business veterans are anxious about the current economic situation due to the Sino-US trade war and local social unrest. They believe fluctuations in the economy will not end in the near future.

Wai said the authority may end up selling the flats it acquired this year at prices below cost. But crisis also creates opportunities, he said.

"There are many uncertainties for Hong Kong's economy. If there was an economic recession, property prices would drop and the authority would be able to acquire flats at lower costs," he wrote.

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