Culture hub banks onsites as deficit loomsLocal | Staff reporter 22 Jun 2020
Two parcels of idle land in the West Kowloon cultural district will be tendered out for the construction of two commercial buildings, which will bring additional income for the arts and culture hub.
Sources said the two sites next to the M+ Museum will provide a total floor area of 500,000 square feet for office and retail purposes , with constructions expected to be completed by 2024 at the earliest, Sing Tao Daily, sister newspaper of The Standard, reported yesterday.
The West Kowloon Cultural District Authority expects the arts and culture hub to incur a deficit of some HK$3.9 billion over the next three years.
As exhibition venues will begin operations in the next year or two, the authority said it hopes the commercial buildings can cover some of the expenditure. It is understood that the authority plans to invite tenders at the end of this year.
Sources said the parcels will be developed via the build-operate-transfer model, where the developer who wins the tender will have the right of operation for 30 years.
Profits will be shared between the developer and the authority, providing the authority with a stable source of income and contributing to sustainable financing.
After the contract ends, the developer can either negotiate with the authority, or the authority can reclaim the right of operation.
Although the two sites can be developed into hotels, offices or residential projects, sources said the land will not be used for housing development.
It is expected that developers will be interested in competing for the sites, as they are located at the main entrance of the cultural district, near the M+ building and the Lyric Theatre Complex, where visitor flow is guaranteed.
It could be the authority's first profitable commercial project, with development of the sites expected to begin sooner than for other cultural district's other projects.
Vincent Cheung Kiu-cho, managing director of Vincorn Consulting and Appraisal, said the M+ building is the center of the cultural hub.
"The property values of commercial buildings near the museum will be higher," he said, adding that he expects office rents to reach HK$40 to HK$50 per square foot. Some offices may be used as galleries and rents could reach HK$100 per square foot.