'Bonus plot ratio scheme a core step in urban renewal'

Property specialists have applauded the government's introduction of the Bonus Plot Ratio Pilot Scheme, viewing it as a crucial move toward urban revitalization in Hong Kong. The initiative aims to spur private redevelopment efforts and motivate developers to renovate the city's aging residential properties. The program allows developers to redevelop older, residential buildings in seven designated districts—recognized as some of the city's oldest neighborhoods—by obtaining an additional 20% bonus in gross floor area, which is applicable without cost.

However, the redevelopment process is restricted to buildings that are at least 50 years old and sites spanning at least 700 square meters.

Hannah Jeong, the executive director and head of valuation and advisory services at CBRE Hong Kong, highlighted the initiative's potential to inject positive momentum into the city's urban redevelopment efforts. She noted that while the 20% bonus ratio is appealing, as it compensates developers for their costs, it remains to be seen how many suitable sites will be identified.

Jeong suggested that while immediate effects might not be apparent, the scheme could stimulate developers to more actively explore available opportunities in the market, allowing them to consolidate their efforts for future projects.

Lau Chun-kong, the managing director at Colliers, echoed similar sentiments, describing the move as an important initiative to boost the redevelopment potential of certain older buildings. He pointed out that developers who have partially assembled sites but not yet completed the projects could benefit significantly. With the new incentive, developers would have a higher land value to facilitate or subsidize the buying of existing units.

The seven major old districts targeted by the scheme include Cheung Sha Wan, Ma Tau Kok, Mong Kok, Sai Ying Pun, Sheung Wan, Tsuen Wan, Wan Chai, and Yau Ma Tei. Developers who commit to redeveloping qualified old residential buildings into new homes will receive the 20% floor space bonus free of charge. Additionally, they can convert the bonus into a land premium credit, which can be utilized in other land transactions within the Northern Metropolis or elsewhere in the Special Administrative Region. The scheme is set to commence on September 1 and is planned to run for five years.