Hong Kong’s top urban redevelopment watchdog wants to tighten regulations to deal with soaring acquisition and constructions costs.
The Urban Renewal Authority (URA) is warning that unless rules are changed, redevelopment projects could incur losses of up to HK$300 million (US$38.5 million) each, according to the Hong Kong Economic Journal.
URA is planning to limit such projects to bigger developments with a minimum construction site of 700 square meters.
Also, consent from at least 80 percent of property owners in any redevelopment project is required.
At present, the minimum site area is 400 sq.m. and redevelopment can proceed with the consent of 67 percent of owners.
Meanwhile URA reported a HK$1.1 billion operating surplus for 2014, helped by initial payments from developers and sales from several completed projects.
It made a loss of HK$2.3 billion for the 2013-2014 financial year.
URA said it expects revenue from at least three projects this year including a joint hotel development with Regal Hotels International Holdings Ltd. (00078.HK) and Paliburg Holdings Ltd. (00617.HK).
The Tai Kok Tsui hotel project, with an estimated investment of HK$900 million to HK$1 billion, will supply 250 rooms.
Construction is expected to be completed in three to four years.
Translation by Vey Wong
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