Page 159 - URA Annual Report 2021-22

(expressed in Hong Kong Dollars)
9. Properties under development (Continued)
Notes (Continued):
(i) (Continued)
In respect of domestic properties, the assessment of HPA is based on a notional replacement flat of 7 years old which is assumed to be in a comparable quality building, situated in a similar locality in terms of characteristics and accessibility, being at the middle floor with average orientation not facing south or west, and without seaview. The HPA paid to the owner-occupiers represents the difference between the assessed value of the notional 7-year-old flat and estimated market value of the acquired property at the offer date. The owner will also receive the estimated market value of his flat in addition to the HPA.
As at 31 March 2022, the Group’s estimated cash outflow in respect of project under acquisition and resumption as well as construction cost for self-developed projects was $6.3 billion (31 March 2021: $7.1 billion), without accounting for any future cash inflow for the projects.
(ii) The Group launched the Flat-for-Flat (“FFF”) Scheme to provide domestic owner-occupiers affected by the Group’s redevelopment projects commenced after 24 February 2011 with an alternative option to cash compensation. The owner-occupier taking the option of FFF will have to top up if the price of the new flat is higher than the cash compensation for his old flat. The domestic owner-occupiers could have a choice of “in-situ” flats on the lower floors of the new development or flats in an FFF Scheme at Kai Tak.
10. Building rehabilitation loans
As at 31 March 2022, the building rehabilitation loans are analysed as follows:
Non-current portion Current portion
2022 $’000
8,348 3,935
12,283
2021 $’000
9,834 4,348
14,182
The building rehabilitation loans are interest-free, except for default, in which case interest will be charged on the overdue amount at the Prime Lending Rate quoted by The Hongkong and Shanghai Banking Corporation Limited. The Group reserves the right to impose legal charges over the properties for loans of amounts between $25,001 and $100,000. All non-current portion of building rehabilitation loans are due within five years from the end of the reporting period.
The maximum exposure to credit risk of the Group is the carrying value of the building rehabilitation loans.
URA ANNUAL REPORT 2021-22 153