'Private sector should take lead in urban renewal'

The private sector has historically generated about four-fifths of new residential units from redevelopment projects in Hong Kong, while the Urban Renewal Authority (URA) accounted for only the remaining one-fifth, a development official said on a radio programme. Doris Ho, Permanent Secretary for Development (Planning and Lands), expressed optimism that the government's Bonus Plot Ratio Pilot Scheme, set to take effect in September, would significantly boost market participation in urban renewal.

The initiative offers developers a 20 percent premium-free gross floor area bonus when demolishing and rebuilding ageing residential buildings in seven designated old districts. Ho cited URA's internal analysis, which revealed that 90 percent of potential redevelopment projects in densely built areas like Mong Kok and Yau Ma Tei are financially unattractive without such a boost.

The scheme's flexibility allows developers to apply the bonus directly on-site or convert the additional plot ratio into cash-equivalent value, which can be used to offset land premiums or reduce premiums when bidding for government sites. The authorities plan to review the scheme's performance within one to two years, hoping to turn previously unviable projects into viable ones and making the market more dynamic in redevelopment.