Urban Renewal Authority 2018-19 Annual Report

77 MANAGEMENT DISCUSSION AND ANALYSIS Individual projects, with various development potentials, are tendered out at different times during property market cycles. Subject to the market conditions prevailing at the time of tender submission, the upfront payments may be higher or lower than the URA’s acquisition costs. As at 31 March 2019, the total costs of properties under development, excluding provision for impairment, was $29,609 million. The value of properties under development is exposed to the risk of property price fluctuation. Should the projected future value of the properties under development is lower than its actual/estimated acquisition and clearance costs, impairment loss will be recognised in the URA’s books. It is estimated that a total cash outlay of about $34,000 million, excluding operational overheads, will be required in the coming five years to meet both of the URA’s currently outstanding commitments and its forthcoming cash outlay for the implementation of the projects. This amount covers the URA’s work in redevelopment, rehabilitation, preservation and revitalisation. The URA will continue to review its businesses with an aim to maintaining a highly prudent financial position and having due regard for commercial principles in its operations so that the urban renewal programme could be sustainable in the long term.