URA begins property acquisition for Kowloon City Road / Sheung Heung Road project today
The Urban Renewal Authority (URA) today (Monday) issued acquisition offers to property owners of the Kowloon City Road / Sheung Heung Road project in Ma Tau Kok, Kowloon City district. Among others, eligible owner-occupiers of domestic properties affected by the project are offered $10,232 per square foot of saleable area, which is the market value of a notional seven-year-old flat, based on the assessment conducted by independent valuation consultants on 10 October 2012.
The acquisition offer for the project was recently approved by the Land, Rehousing and Compensation Committee of the URA on 19 October 2012 after careful deliberations.
Property owners are given 60 days to consider and accept the offer upon receiving the offer letters. The Kowloon City Road / Sheung Heung Road project affects a total of 118 property interests with some 264 households.
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 it 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.
On top of the market value of the acquired properties, eligible domestic 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 prevailing 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 URA's initial proposal is to redevelop the site to provide about 180 residential units with flat sizes of around 23 square metres to 60 square metres in saleable area, among which some 20 units of lower levels will be reserved for in-situ FFF option. It is tentatively scheduled for completion and occupation by 2019/20, while the Kai Tak flats are targeted for pre-sale in 2014/15 and occupation in 2016/17.
The fixed unit prices of the in-situ flats and Kai Tak flats offered to owners were assessed by independent valuation consultants in parallel with that of the unit rate of the notional seven-year-old flat for the project on the same date of 10 October 2012.
The fixed unit prices of in-situ flats at the new development are from $8,804 to $9,038 per square foot (saleable area), while those for the Kai Tak flats are from $10,310 to $11,886 per square foot (saleable area).
Owners of domestic properties 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 $123,300. For domestic property that is wholly tenanted or vacant, the ICA is $96,100.
For non-domestic properties, the acquisition offers will include an ex-gratia allowance on top of the market value. The allowance for tenanted or vacant non-domestic property is 10% of its market value or one time the government rateable value, whichever is higher. The allowance for owner-occupied non-domestic property is 35% of its market value or four times its rateable value, whichever is higher.
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 occupancy 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.
The market value of each domestic and non-domestic property is based on the higher valuation of two independent valuation firms appointed by the URA.
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 is going to organise briefings shortly 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, an independent party from the URA, will provide counselling and practical assistance that the residents may need. The contact number of the social service team is 3188-2425.
Being the seventh redevelopment project implemented by the URA in Kowloon City district, the project area occupies about 1,622 square metres covering 16 street numbers of buildings that were built in 1950s. The buildings are 4 to 8 storeys with no lifts and are in a generally poor condition. Unauthorised rooftop structures are also observed.