Hong Kong government incentive to boost urban redevelopment in older districts

A rare Hong Kong government incentive for developers will help revive old neighbourhoods such as Sham Shui Po, where redevelopment projects have stalled amid a sluggish property market, analysts have said.

They said on Thursday that the bonus plot ratio pilot scheme, due to launch next month, would provide private developers with a financial incentive to redevelop the city’s older neighbourhoods, many of which are plagued by acute urban decay.

Under the scheme, the government will grant developers an extra 20 per cent of gross floor area or an equivalent land premium value in seven old districts.

Analysts also called for further measures, including a later review of the scheme, adjustments based on market feedback, and an expansion to cover more districts.

“The scheme is equivalent to boosting the site’s redevelopment value by 20 per cent. It serves as a financial incentive that makes redeveloping certain borderline-case old buildings viable,” said lawmaker Augustine Wong Ho-ming, who represents the real estate and construction sector.

He said Sham Shui Po could see faster redevelopment under the scheme than areas such as Wan Chai because it had more borderline-case old buildings – ageing properties whose redevelopment feasibility sits on the edge between being financially viable and non-viable.