Property acquisition for Hang On Street demand-led redevelopment project to start soon
The Urban Renewal Authority (URA) will soon issue conditional acquisition offers to property owners affected by the Hang On Street demand-led redevelopment project in Kwun Tong following its commencement in November 2014. It is the third demand-led redevelopment project under the third round of the pilot scheme.
Eligible owner-occupiers of domestic properties of Nos. 12 - 30 Hang On Street (even numbers) will be offered $11,695 per square foot of saleable area which is 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 project were deliberated and approved by the Land, Rehousing and Compensation Committee of the URA Board yesterday (Wednesday).
Letters setting out details of the conditional offers to owners of 90 property interests of the project will be issued within this week, which will be valid for 75 days from the issuance of the offer. There must be an acceptance of URA's conditional offers with execution of Conditional Sale and Purchase Agreements by owners of not less than 80 percent of undivided shares of each lot in the redevelopment site within the said 75 days before the project is taken a further step for implementation.
If acceptance of the conditional offers and execution of Conditional Sale and Purchase Agreements up to the said level of 80 percent 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.
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 domestic 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 domestic 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 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 offer period. The current ICA for owner-occupied domestic property is $132,000. For domestic property that is wholly tenanted or vacant, the ICA is $102,500.
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 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 Christian Family Service Centre, which has been appointed by the Urban Renewal Fund, will provide counselling and practical assistance that the residents may need. The contact number of the social service team is 3580 8841.
The project occupies an area of about 865 square metres covering 10 street numbers. The URA's current proposal is to redevelop the project to provide about 5,950 square metres of residential floor area for about 115 residential units and some 740 square metres of commercial/retail and institution or community facilities. The project is tentatively scheduled for completion by 2021/2022.
(ENDS)