Industrial buildings more than 30 years old will be torn down and replaced by residential blocks to increase housing supply and make better use of land in rundown areas, the Urban Renewal Authority says.
The URA plans to undertake 20 to 25 URA-initiated and demand-led projects at a total development cost of HK$25 billion in the next five years, the URA said. It expects to lose HK$100 million on the scheme.
The government is prepared to inject more money into the URA, an independent body, to facilitate the redevelopment, expected to cost HK$25 billion.
The first building the URA will work on is in Kennedy Town next to a station on the West Island MTR line now under construction. The site has been rezoned from industrial to residential use, so "redevelopment can begin promptly once property owners have been compensated", URA chairman Barry Cheung Chun-yuen said.
Cheung Hing Industrial Building on 12P Smithfield is a 40-year-old block with 14 owners. The 944 square metre site will be used to build 180 flats by 2019 at a cost of HK$1.2 billion.
The scheme is expected to create 4,500 residential flats over the next five years, of which about half will be smaller than 500 square feet.
The scheme targets dilapidated industrial buildings more than 30 years old, with little heavy industrial activity, and which occupy sites of more than 1,000 square metres. Not more than 30 per cent of the properties should be possessed by a single owner.