Kowloon Development may redevelop a graded historical site in Ngau Chi Wan for residential and retail use to preserve part of the area as heritage. The site, spanning 230,000 square feet near the Choi Hung Mass Transit Railway (MTR) Station, is occupied by St Joseph's Home for the Aged, built in the 1930s and owned by the Little Sisters of the Poor. The Antiquities and Monuments Office is trying to prevent part of the graded historical building from being demolished. Kowloon Development earlier conditionally agreed to acquire exclusive development rights from its controlling shareholder, Polytec Holdings. A source at Kowloon Development said an understanding had been reached between the developer and the Government, and redevelopment could start next year, after planning and lease modification procedures were completed. He did not say whether the Government would grant incentives, such as transfer of development ratio, or reduce land premium for preserving part of the historical building. 'Details about the redevelopment will be announced within a couple of weeks,' the source said. He said that Polytec sought to negotiate development rights five to six years ago and a development agreement was signed last month. The agreement required Polytec to build a new home for the aged in Sheung Shui, with completion by the end of next year, to accommodate more than 100 residents in St Joseph's Home for the Aged, he said. Kowloon Development would demolish St Joseph's Home for the Aged and construct a multi-storey building with a retail portion and residential units if the acquisition went ahead. It would pay HK$520 million to the Little Sisters of the Poor, bearing all costs and expenses including the payment of land premium. Surveyor Knight Frank estimated development rights were worth at least HK$1.2 billion. A planning official said the site had been zoned as a comprehensive development area and would have a maximum plot ratio of 7.5 times. It has the potential to develop about 1.72 million sq ft of residential and retail space when approved. SK Pang Surveyors managing director Pang Shiu-kee estimated the project would be worth more than HK$5 billion after completion and the accommodation cost would be about HK$1,400 per square foot. 'It's a very good site, large enough and located near an MTR station and bus interchange,' he said.