A 10-storey industrial building in Cheung Sha Wan will be redeveloped into a commercial building at a cost of HK$1.7 billion in the latest project of the Urban Renewal Authority, announced on Friday.
The project, the authority’s second redevelopment of a factory building, is expected to incur a loss of up to HK$500 million by the time it is completed in 2019-2020. The 50-year-old Wing Hong Factory Building on Yu Chau West Street has about 40 owners and 40 business operators. The 1,400 square metre building will be replaced with one of 16,700 square metres. The URA said the loss was only slight and would not constitute a big problem. The acquisition price will not be made known for about six months.
“It would be irresponsible to announce the price now,” William Wan Shiu-wah, director of property and land of the URA, said on Friday.
“Firstly, the two surveyors are not decided yet. Secondly, if I announce the price now it will give a price guide to other surveyors. Thirdly … the acquisition will be made several months later and there are big fluctuations in the property market.”
The URA will pay owner-occupiers the market value of the property plus an “ex-gratia”, or special allowance equal to four times the amount the government usually pays. Owners of vacant or leased units will receive the market value of the property plus 1.5 times the allowance while tenants will get 2.5 times the allowance.
Owners’ corporation chairman Dickson Chau Chi-wai, who has four units in the building, said the owners were interested in the acquisition but would have to see to the price.
“It is definitely not reasonable for tenants to comply with the acquisition before knowing the price,’ he said, adding that it was quite difficult to find similar units in the same district.
The URA’s first such project, turning an industrial building in Kennedy Town into a residential block, met serious resistance in late last year because of what was seen as a low acquisition price.
The affected parties can file their objections to the URA in the coming two months. In the following three months, the authority will review and deal with the complaints before seeking approval of the project from the Development Bureau. Opponents can then file their complaint again in the ensuing month.
Two surveyors will be employed to assess the market value of the building and announce the acquisition price.