West Kowloon arts hub deficit widens to HK$998 million as operating costs rise

The West Kowloon Cultural District Authority (WK CDA) reported a widening deficit of HK$998 million (U$127 million) for the 2025-26 financial year, primarily due to rising operating costs as it prepares for the opening of the new WestK Performing Arts Centre in autumn 2027. Despite this, the authority anticipates an increase in revenue next year through a residential development project tendered for in the first half of 2027, with completion projected for 2031.

Revenue for the year ended March 30 saw a 19% increase to HK$768 million, driven by growth in ticket sales, sponsorship, and sales of intellectual property and creative products. However, operating costs rose by 13% to HK$1.85 billion, primarily due to expanded operations, higher visitor numbers, and increased costs for facilities management and technology. Staff costs also rose by 12% to HK$638 million.

WK CDA CEO Betty Fung Ching Suk-yee noted that the deficit remains within control, below the HK$1 billion limit, and emphasized that additional revenue is expected from the residential project tender. The first residential package, Zone 2B, is slated for tender in the first half of 2027, with completion expected in 2031. The development will include over 1,000 residential units and 500 parking spaces.

While the relaxed framework permits a maximum gross floor area of 170,280 sq m for Zone 2, the Zone 2B package covers up to 108,500 sq m, including retail, dining, and entertainment facilities. Fung highlighted that M+ and the Hong Kong Palace Museum achieved cost recovery rates of around 50%, comparable to major cultural institutions worldwide, such as the Metropolitan Museum of Art in New York and the Centre Pompidou in France.

Overall, the authority's basic operating cost recovery rate, excluding interest income, improved to 40% in 2025-26, up from 37% in the previous year.