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Property acquisition for a demand-led redevelopment project in Sham Shui Po to start soon

The Urban Renewal Authority (URA) is going to issue conditional acquisition offers shortly to property owners affected by one of its three debut demand-led redevelopment projects commencing in early April this year. The compensation policy is same as that of the URA's self-initiated projects.

The Land, Rehousing and Compensation Committee of the URA Board today (Friday) deliberated and approved that eligible owner-occupiers of domestic properties affected by the demand-led project at 229A-G Hai Tan Street in Sham Shui Po will be offered $8,830 per square foot of saleable area, which is the unit rate of a notional flat of seven-year-old  situated in a similar locality.  For this project, no objection to it has been received during the two-month publication period.

As for the other two demand-led projects at 13-31 Pine Street and 87 Oak Street in Tai Kok Tsui and at 205-211A Hai Tan Street in Sham Shui Po, written objections were received during the two-month publication period ended on 20 June 2012. As required by the law, URA has to consider such objections and submit the project to the Government within three months at the end of the two-month publication period with its deliberations on the objections to seek the Government's authorisation of the project. As a result of these objections, no offers will be made for these two projects at present.    

Letters outlining details of the conditional offers to owners of 58 property interests at 229A-G Hai Tan Street will be issued shortly, which will be valid for 60 days from the date of the offer. There must be an acceptance of URA's conditional offers with execution of Sale and Purchase Agreements by owners of not less than 80% of undivided shares of each lot in the redevelopment site within the said 60 days before the project is taken a further step for implementation.

If acceptance of the conditional offers up to the said level of 80% is successfully attained and if the project submitted by URA to the Government has been authorised by the Government thereafter, the URA will then complete the acquisition with owners and full purchase price will be paid. Otherwise, the URA will not proceed with the project.

Like other URA projects, 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 the value of a notional seven-year-old flat of similar size in the 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 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 flat-for-flat 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 professional 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 Sham Shui Po project at 229A-G Hai Tan Street is 483 square metres in area. The URA's initial proposal is to redevelop it to provide around 70 residential units of small to medium size, including some at the lower levels for flat-for-flat option. It is tentatively scheduled for completion by 2019/20.

(ENDS)