Property acquisition for two demand-led redevelopment projects to start soon
The Urban Renewal Authority (URA) will soon issue conditional acquisition offers to property owners affected by its two demand-led redevelopment projects in Tai Kok Tsui and Sham Shui Po commenced earlier in June this year.
Eligible owner-occupiers of domestic properties of No. 8 - 10 Fuk Chak Street/ 7 - 9 Li Tak Street in Tai Kok Tsui, and No. 25 - 31 Wong Chuk Street in Sham Shui Po will be offered $11,020 and $9,863 per square foot of saleable area respectively which are equivalent to the unit rate of a notional replacement flat of seven-year-old situated in similar locality and of similar size.
The conditional offers for the two projects are deliberated and approved by the Land, Rehousing and Compensation Committee of the URA Board after careful deliberation today (Friday).
Letters outlining details of the conditional offers to owners of 109 property interests of the two projects will be issued shortly, which will be valid for 75 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 sites within the said 75 days before the projects are 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 projects submitted by URA to the Government have 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 projects.
Same as 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 seven-year-old notional replacement flat of similar size in 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 seven-year-old notional replacement 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 75-day period. The current ICA for owner-occupied domestic property is $127,900. For domestic property that is wholly tenanted or vacant, the ICA is $99,500.
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 / 2117 8671.
The two projects combined are 1,200 square metres in area. The URA's initial proposal is to redevelop them to provide around 165 residential units of small to medium size, including some at the lower floor levels for flat-for-flat option. It is tentatively scheduled for completion by 2019/20.