Page 79 - Urban Renewal Authority 2023-24 Annual Report

(V) Financial Outlook and Management Chairman’s Statement
The local property and financial markets, which are impacted by external environment factors including
sustained interest rate hikes, trade disputes and geopolitical tensions, remain volatile. With the cancellation
of all demand-side management measures for residential properties with effect from 28 February 2024, the
sentiment among flat purchasers has shown improvement but the developers’ appetite for land bids is yet
to be tested. The result of URA’s future project tenders and related revenue are still uncertain.
On the expenditure side, it is estimated that a total cash outlay of about HK$82,000 million, excluding Managing Director’s Statement
operational overheads, will be required to meet both of the URA’s currently outstanding commitments and
its forthcoming cash outlay in the coming five years for the implementation of all projects included in the
latest Corporate Plan. This amount covers the URA’s works in redevelopment, rehabilitation, preservation,
revitalisation and retrofitting.

According to the latest estimate, a total funding of about HK$64,300 million is required to complete those
ongoing redevelopment projects only. In addition to current net liquidity of HK$17,695 million, the
projected cash outlay will be met by future upfront payments from project tenders, share of surplus sales
proceeds from joint development projects and proceeds from sale of properties in the corresponding
period. Moreover, external financing will also be arranged to cope with anticipated cash shortfall in coming Operating Review
years.
In July 2023, the Financial Secretary approved the URA’s request to raise its borrowing limit to HK$25
billion. On 19 April 2024, Standard & Poor (S&P) Global Ratings affirmed the URA’s long-term issuer credit
rating and senior unsecured notes rating at “AA+” with “Stable” outlook, same as the HKSAR Government.
At the same time, S&P also affirmed the “Likelihood of Extraordinary Government Support” for the URA
from the HKSAR Government at “Almost Certain”. The URA has updated its MTN Programme to facilitate
bond issuance for 2024/25 and onwards.

As a public sector entity with a sovereign credit rating, the URA is in a strong position to raise sufficient Corporate Sustainability
funds from the financial markets. With the approved borrowing limit of HK$25 billion, the URA plans to
borrow in phases to meet the financial requirements at different stages for implementing the latest
Corporate Plan.

Facing the financial uncertainties and challenges ahead, the URA will continue to manage its businesses in
an agile manner and monitor its financial position closely, with an aim to accomplish its urban renewal
missions while maintaining long-term sustainability. Management Discussion and Analysis

URA ANNUAL REPORT 2023-24 77 Projects at a Glance
Corporate Governance