URA issues acquisition offers for projects in Tai Kok Tsui and Hung Hom

The Urban Renewal Authority (URA) issues offer letters today (Thursday) to owners of 90 property interests affected by its Bedford Road/Larch Street and Baker Court projects at a total acquisition cost of about $207 million.

Owner-occupiers of domestic properties affected by the Bedford Road/Larch Street project in Tai Kok Tsui and the Baker Court project in Hung Hom will be offered $2,671 and $2,732 per square foot on a saleable area basis respectively.

These offers represent an average of about 3.1 times the open market value of the properties concerned, which are between 35 and 50 years old and have been valued at a unit rate of $860 to $880 per square foot.

"These purchase offers are based on Government' s Home Purchase Allowance (HPA) policy that links the level of compensation to the open market value of a notional seven-year-old replacement flat in a similar locality," a URA spokesman said.

As in previous projects, the URA has appointed seven independent valuation firms by open tender for the valuation of the HPA unit rate. The seven valuations are fed through a weighted average mechanism in which the lowest and highest valuations are eliminated and the remaining five given, in ascending order, a percentage weighting of 10, 20, 40, 20 and 10 respectively, making a total of 100.

"This broad-based and objective method has proved to be acceptable by most owners in our previous projects," the URA spokesman said.

The total development costs of these two projects are estimated at about $515 million, including the costs of property acquisition, tenants rehousing or compensation, property construction and interest.

The owners will have ample time to consider the URA' s offers and to accept them within the next 60 days.

In addition to the purchase offers, owners will receive an incidental cost allowance (ICA), where applicable, as an incentive for them to accept the offers within the 60-day period. This allowance also serves as a subsidy for the removal and various other expenses normally incurred in the purchase of a replacement flat. The ICA is reviewed from time to time in accordance with the Government' s current rate of ex-gratia removal allowance and the latest Composite Consumer Price Index.

For these two projects, the ICA for owner-occupied domestic property is set at $1,030 per square metre (about $96 per square foot) of the saleable area or, in any event, not less than a lump sum of $92,500. For domestic property that is tenanted or left vacant, the minimum allowance is $70,700.

"We will be sending out the offer letters to individual owners today. The letters will contain all the details of the purchase offers and the ICA,' ' the spokesman said.

According to occupancy surveys conducted last month, there were about 180 households with 434 residents in the Tai Kok Tsui project and eight households with 12 residents in the Hung Hom project. The URA will hold a series of briefing sessions next week to explain to the owners and tenants the URA' s acquisition and rehousing arrangements and procedures.

The URA has also designated two urban renewal social service teams operated respectively by the Salvation Army and the Christian Family Service Centre to provide counselling service and practical assistance to residents who may encounter personal or family problems during the redevelopment process.

Upon completion of redevelopment in about six years' time, the Tai Kok Tsui site is expected to yield 152 residential units with a total floor area of about 8,560 square metres, commercial space of around 1,070 square metres and public open space of about 200 square metres. The Hung Hom site is expected to produce 46 residential units with a total floor area of 1,880 square metres and commercial space of 240 square metres.

The two projects bring the total number of the URA' s redevelopment projects to 11, including one undertaken in association with the Hong Kong Housing Society, since March 2002.