The URA's Kwun Tong Town Centre Development Areas 4 and 5 project was earlier "unsuccessful". The URA's Chief Executive Officer, Mr Wai Chi-sing, explained in a weblog yesterday that the project would involve the acquisition of more than 400 private units and the disposal of over 100 unauthorised structures, and that if the land was granted in the midst of a market downturn, the project would suffer a financial loss and reduce the resources that the URA could invest in future urban renewal projects.
He said the development outlook for the project remains positive, with the URA planning to change the project from "commercial use" to "other specified uses (mixed use)" and to combine the "multi-use" concept to create a landmark building for Kwun Tong town centre.
The URA launched the Kwun Tong Town Centre Development Areas 4 and 5 project for tender in November last year, but only one bid was received when the tender closed in January this year, and the project was subsequently rejected after the tender selection panel considered the bids in detail, resulting in the project being "lost".
Mr Wai pointed out that the Tender Selection Panel had taken into consideration a number of factors when considering the bids, including the usual land valuation mechanism of the surveying industry and the transaction data of the relevant property floor area in the market, the circumstances of the developer's bid, whether the bid price was within the acceptable range and the room for development.
He further explained that due to the downward adjustment of the property market, the URA's front-end revenue has been significantly reduced. In addition, considering that four redevelopment projects in Kowloon City and Mongkok that are under acquisition will be launched for tender in the next few years, the preliminary estimate of the total loss will be as high as billions of dollars, the URA needs to re-examine its business agenda for the next five years and prudently consider the matching of the planned projects with its cash flow position.
Mr Wai stressed that the success of any development project put up for tender would depend not only on the developer's bidding strategy, but more importantly, on whether the site could be put to its full use and value.
He pointed out that the URA will adopt a new planning mindset to respond to the market demand for housing, offices, hotels and retail, and upgrade the development plan of the "aborted" landmark building in Kwun Tong town centre from a "two-dimensional space" to a "three-dimensional space" level, so as to complement the future development of the Kowloon East core business district and enhance the attractiveness of the project.
He said that the project's strategic location and its role as a 'city centre' for the convergence of people, logistics and frequent economic activities would remain unchanged and its development prospects would remain positive.
In response to some views in the market that the URA could consider converting the sites in Kwun Tong Town Centre Areas 4 and 5 for residential development, Mr Wai said that if the high-density residential development of traditional "Group A" residential projects were to be adopted, the development potential of the valuable site in the town centre would not be fully utilised and the function of the site in terms of bringing in people, logistics and economic activities would be lost.
It would also be difficult to meet the current air and noise quality guidelines and legislative requirements if residential buildings were to be built above the three-storey shopping mall facilities.
He revealed that the URA plans to change the land in Development Areas 4 and 5 from "Commercial Use" to "Other Specified Uses (Mixed Use)", and to incorporate the concept of "multiple uses of one site" by adding a residential element to the site on the basis of a plot ratio of 12 and a "floating planning parameter" mechanism, so that future successful bidders will have more flexibility in allocating floor space for the development of This will enhance the redevelopment potential and development breadth of the project and improve its returns, while increasing the supply of residential units in line with the positioning of Kwun Tong town centre.
Mr Wai pointed out that the size of the site and the walking distance to the MTR station and public transport interchange would make the project suitable for piloting the "vertical city" concept and creating a landmark building for the Kwun Tong town centre, which would form a "Victoria Harbour Gateway" to the east with the Island East Centre across the water, echoing the Western Gateway formed by the IFC in Central and the World Trade Centre in West Kowloon.
He said that the URA has had preliminary exchanges with relevant government departments on the concept of the "mixed development" plan and received positive responses. It has also commenced a comprehensive technical assessment, particularly on the traffic load, to deepen the relevant planning and implementation details, with a view to submitting the application for change of use to the TPB within this year, which is expected to take about 24 months to complete the necessary procedures.
