Property acquisition for Fuk Wing Street project to start early next month
The Land, Rehousing and Compensation Committee of the Urban Renewal Authority (URA) Board has deliberated and approved today (Friday) that eligible owner-occupiers of domestic properties affected by the Fuk Wing Street project in Sham Shui Po will be offered $8,398 per square foot of saleable area, which is the assessed market value of a notional seven-year-old flat.
The URA will issue offer letters to property owners early next month, who will then have 60 days to consider and accept the offers.
The Fuk Wing Street project in Sham Shui Po affects a total of 32 property interests, including about 110 households and nine non-domestic operators.
The acquisition offers for domestic properties are calculated in accordance with the Government's Home Purchase Allowance (HPA) policy in which HPA is the difference between the market value of the acquired property and that of a notional seven-year-old flat of similar size in a similar locality. In addition to the market value of the acquired properties, eligible owner-occupiers will receive the full HPA amount whereas eligible owners holding wholly tenanted or vacant domestic properties will receive a supplementary allowance (SA) up to half of the HPA.
In line with the established mechanism, the URA has appointed seven independent valuation firms for the valuation of the unit rate of the notional seven-year-old flat. The whole process is virtually transparent, open and fair.
Domestic owner-occupiers of the project will also be offered the flat-for-flat (FFF) option in accordance with the new Urban Renewal Strategy (URS). Owners can consider taking cash compensation or using it to buy a new flat in-situ in the new development or in the Kai Tak development. The fixed unit prices for the FFF option will be included in the offer letters.
In considering the option, the domestic owner-occupier can obtain independent professional surveyor's advice on the fixed unit sales prices, for which the URA will reimburse a professional fee not exceeding $8,000 provided the owner accepts the acquisition offer with the option within the 60-day offer period and upon completion of purchase by the URA of the affected property interest.
Domestic owners will also receive an incidental cost allowance (ICA) as an incentive for them to accept the offers within the 60-day period. The current ICA for owner-occupied domestic property is $121,500. For domestic property that is wholly tenanted or vacant, the ICA is $94,800.
For non-domestic properties, the acquisition offers to eligible owners will include an ex-gratia allowance on top of the market value. The allowance for tenanted or vacant non-domestic property is 10 per cent of its market value or one time the government rateable value, whichever is higher. The allowance for owner-occupied non-domestic property is 35 per cent of its market value or four times its rateable value, whichever is higher. The market value of each non-domestic property is based on the higher valuation of two independent valuation firms appointed by the URA.
Eligible owners and tenants who operate business in the affected shops will enjoy an additional Ex-gratia Business Allowance (EGBA) payable at the rate of 0.1 time rateable value for each year of continuous occupation of the premises up to a maximum of 30 years, subject to a minimum amount of $70,000 and a maximum of $500,000.
Based on the URA's policy, eligible owners holding tenanted domestic properties will not get any additional compensation for terminating the tenancies with their tenants since their eligibility to compensation is based on their tenanted status on the date of freezing survey; nor will they be entitled to the FFF option in the event of obtaining possession from their existing tenants after the date of freezing survey.
Upon completion of the property acquisition, the URA will make ex-gratia payment or rehousing arrangement for the domestic tenants concerned, if eligible.
The URA will organise a series of briefings for the affected owners, residents and shop operators to explain to them the acquisition and compensation and rehousing arrangements. An urban renewal social service team staffed by social workers of Salvation Army, which is appointed by the Urban Renewal Fund Limited will provide counselling and practical assistance that the residents may need. The contact number of the social service team is 3586 3095.
The Fuk Wing Street project covers an area of about 650 square metres. Built in 1956, the six building blocks within the project area are in a poor condition with a number of unauthorised building works and rooftop structures.
The URA's initial proposal is to redevelop it to provide about 70 residential units with flat sizes of around 40 square metres to 60 square metres and, tentatively scheduled for completion by 2018/2019.