URA’s 12 Billion Surplus Surpasses New Record Tokagua Bay Redevelopment Sets Lower Price Limit Resale
The property market continued to prosper. The URA recorded a surplus of more than $12 billion in 2017/18, setting a record for the calendar year. The URA’s assets accumulated to 44.6 billion yuan, which also hit a new high. The URA explained that it was the sale of the Gambian Street commercial project during the year, which resulted in a huge profit. The URA plans to launch the Tougua Wan Ma Tau Wai Road/Springfield Street Development Project at close to 500 units at below-market prices at the end of this year. The project will set a restriction on resale and will require owners to provide for the project’s “Building Rehabilitation Reserve Fund”. Money for future restoration.
The potential for future projects will be low
Su Qingqing, Chairman of the URA, said at a meeting with the media yesterday that the annual URA had recorded a “very high” surplus, mainly because the commercial projects at the Garment Street in Central sold “very good prices” because of the URA’s holdings. With few commercial projects and low potential for reconstruction of old buildings in the future, we believe that the current surplus has reached its peak. He said that the URA will invest more than 10 billion yuan in the acquisition of old buildings in the coming year. The addition of the listed public utilities bureaus to expand and rebuild projects in recent years in a residential mode will increase the scale and the URA will need to purchase old buildings in accordance with the 7-year-old policy. To increase the URA’s financial commitments, it is necessary to ensure a sound financial position so as to reduce the risk of “high buy and low sell” due to market changes.
4 A total of 10.2 billion surplus in the reconstruction project last year
The documents submitted by the URA to the Legislative Council show that the four redevelopment projects completed in 2017/18 have recorded a surplus of 10.265 billion yuan in total. Among them, the surplus of “Yuanhui” at Lidong Street in Wan Chai is the highest, reaching 8.84 billion yuan; The Wan Chai project “Shang Fengfeng/Shenghuan” also recorded a surplus of 1.117 billion yuan, while Tai Kok Tsui’s “Sharp Goods Stardom” project recorded a surplus of 473 million yuan. The “Skypark” project of the URA at Bosje Street in Mong Kok recorded a loss of RMB 165 million.
In view of the government’s request for the URA to study whether it is feasible to provide subsidized housing, Wei Zhicheng, executive director of the URA, said that since the Ma Tau Wai Road/Springfield Street development project independently developed by the URA has not cooperated with the developer, the URA can decide on its own initiative. The selling price is being planned to be decoupled from the market price and sold below the market price. It is expected that the short-term sales will be at the end of the year. As for the specific price below the market price, he said that there is no final settlement and depends on the financial burden of the URA. Further discussion. He said that restrictions on reselling would be set up in the project to prevent anyone from speculating on this.
The proprietor of the proposed restoration fund must make regular contributions
Wei Zhicheng stated that in order to strengthen the awareness of promoting building rehabilitation, the URA also intends to use this project as the first pilot to establish a mandatory “Building Rehabilitation Reserve Fund.” It requires the owner to sign a promise when purchasing a unit and make regular contributions to the fund. For the future rehabilitation of buildings; even if the owners will not be able to get back the money for the sale of units in the future, the next owner will also need to sign a commitment; but he admits that the implementation details are more complex and he needs to study issues such as the mode of contribution and fund management. He said that if the plan responds well, it does not rule out the possibility of future studies setting up rehabilitation funds in other projects.
The Ma Tau Wai Road/Springfield Street Development Project in To Kwa Wan resulted in a building collapse accident at the end of January 2010. It caused 4 deaths and 2 injuries. The URA subsequently took up the reconstruction alone. The project will construct two buildings with 30 heights. The residential building on the ground floor provides a total of 493 units and is expected to be completed in November next year.