Page 7 - Urban Renewal Authority 2023-24 Annual Report

Rising to Challenges with Flexibility and Chairman’s Statement

Creativity to Sustain Urban Renewal

The year 2023/24 was a challenging year for the URA. Against the background of Managing Director’s Statement
successive interest rate hikes, the global economic and market environment
remained volatile. Hong Kong’s economy experienced a slower post-pandemic
recovery than expected. Increased mortgage pressure reduced the public’s
purchasing power in the property sector, while rising interest costs on financing
prompted developers to exercise greater cautious in their land bidding and pricing
strategies. All these factors have put URA’s project tenders and financials under
pressure.

Over the past year, the URA had only one project, Shing Tak Street/Ma Tau Chung Operating Review
Road Development Project in Kowloon City, put out for tender. Awarded at
HK$1.934 billion, the project incurred a loss of nearly HK$1.5 billion due to the “buy
high, sell low” situation arising from the project tender price being lower than the
initial acquisition cost amidst the property market downturn. The URA’s upfront
payment received for the year was 60 percent less compared to the previous year.
In property acquisition, the URA in April last year, issued acquisition offers to about
830 property interests of the Kim Shin Lane/Fuk Wa Street Development Project,
involving an estimated total acquisition cost of approximately HK$8 billion. Corporate Sustainability

As of the end of 2023/24, the URA recorded an operating loss of about HK$830
million. With a provision for impairment on properties and committed projects of
around HK$3.1 billion, the URA reported a net loss of HK$3.9 billion. Its net asset
value stood at HK$46.4 billion.
To tackle urban decay, redevelopment alone is insufficient. Regular maintenance
and rehabilitation of buildings are essential. However, owners of older buildings
often lack the necessary capabilities, knowledge and finances for carrying out
building rehabilitation, impeding maintenance works and exacerbating potential
safety hazards. The URA is therefore committed to promoting building rehabilitation
and assisting property owners in fulfilling their repair and maintenance obligations.
In the past year, the URA faced these challenges with determination. We employed Management Discussion and Analysis
a multi-pronged and flexible approach in project planning, building rehabilitation,
and financial planning to advance urban renewal in an orderly manner. We have
achieved many key milestones, and we have prepared ourselves to face future risks. Projects at a Glance

URA ANNUAL REPORT 2023-24 5 5 Corporate Governance