HK's URA to acquire 159 flats at record prices

HK's URA to acquire 159 flats at record prices
May 18, 2011

A clutch of shabby flats at To Kwa Wan in Kowloon, Hong Kong are set to be offered at record prices.

The Urban Renewal Authority (URA) is all set to pay HK$9,785 psf to acquire 159 flats in a region bounded by Chun Tin Street, Ma Tau Wai Road and Hok Yuen Street. The shabby flats will be replaced by 400 new flats of sizes below 500 sq ft each.

The price offered by the URA is twice the current price for flats in Kowloon, as well as the highest unit-price offered by the authority for a property in the area.

Boosted by recent market trends, the offer will take the rebuilding project costs — purchasing, re-housing and development — to HK$1.52 billion from the last estimate of HK$1.45 billion. A loss of HK$1 billion is anticipated for the project.

The development cost for each sq ft of the 400 new flats will be approximately HK$3,000.

Barry Cheung Chun-yuen, Chairman of URA, said, “We attach a great deal of importance to this project, in view of its special circumstances.”

“While awaiting the green light to go ahead with the project, some 143 tenants and owners have so far been given assistance and moved out under special measures.”

According to the authority, the acquisition offers consider the market value of a seven-year-old flat of the same size in a similar location and include the government’s Home Purchase Allowance.

Owners of the 159 flats will be sent offer letters by the end of May and will be given 60 days to decide whether or not they will accept the offer.

Info courtesy - PropertyGuru