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Fiona Sun

A rare Hong Kong government incentive for developers will help revive old neighbourhoods such as Sham Shui Po, where redevelopment projects have stalled amid a sluggish property market, analysts have said.
They said on Thursday that the bonus plot ratio pilot scheme, due to launch next month, would provide private developers with a financial incentive to redevelop the city’s older neighbourhoods, many of which are plagued by acute urban decay.
Under the scheme, the government will grant developers an extra 20 per cent of gross floor area or an equivalent land premium value in seven old districts.
Analysts also called for further measures, including a later review of the scheme, adjustments based on market feedback, and an expansion to cover more districts.
“The scheme is equivalent to boosting the site’s redevelopment value by 20 per cent. It serves as a financial incentive that makes redeveloping certain borderline-case old buildings viable,” said lawmaker Augustine Wong Ho-ming, who represents the real estate and construction sector.
He said Sham Shui Po could see faster redevelopment under the scheme than areas such as Wan Chai because it had more borderline-case old buildings – ageing properties whose redevelopment feasibility sits on the edge between being financially viable and non-viable.
Authorities on Wednesday set out the detailed requirements and arrangements of the bonus plot ratio pilot scheme which is intended to expedite private redevelopment in seven old districts.


The seven districts are Cheung Sha Wan, which includes Sham Shui Po; Ma Tau Kok, which covers Kowloon City and To Kwa Wan; Mong Kok; Sai Ying Pun and Sheung Wan; Tsuen Wan; Wan Chai; and Yau Ma Tei.
Under the scheme, a developer that commits to demolishing a residential building aged 50 or above in the seven old districts and redeveloping the site for residential use will be granted an additional 20 per cent premium-free gross floor area as a bonus. The site must have an area of at least 700 square metres (7,534 sq ft).
Developers can choose to submit planning applications to the Town Planning Board, proposing an increase in permissible gross floor area for in situ redevelopment, with a ceiling of 20 per cent. Upon approval, the bonus plot ratio will be premium-free.
If the developer chooses not to increase the gross floor area at the site by up to 20 per cent, the bonus plot ratio can instead be converted into a land premium value.
This value can be used to offset the land premium payable for the developer’s in situ redevelopment project or for other land transactions in the Northern Metropolis and elsewhere in Hong Kong, including land bidding, lease modification or land exchange projects. The land premium value will be valid for 10 years.
The pilot scheme will run for five years, from September 1, 2026 to August 31, 2031.
Tony Wan Wai-ming, president of the Hong Kong Institute of Surveyors, called the scheme an “olive branch” from the government to private developers to boost redevelopment in the city’s old districts.
He said the scheme would offer financial incentives, and the option to convert the bonus plot ratio into a land premium value usable on other land transactions offered flexibility and could encourage developers to launch more projects.
“This is a very flexible approach. For developers with multiple plots of land, it gives them flexibility to make good use of this policy … and it can also encourage them to undertake other projects elsewhere,” he said.
But Wan urged the government to regularly assess the scheme’s implementation and make adjustments, and suggested expanding it to cover more districts to unleash their redevelopment potential.
Lawmaker Wong also called for a review of the scheme at a later stage and its long-term extension to other areas.
Some cases might require a higher bonus ratio and authorities should assess them on a case-by-case basis, he suggested.
Hong Kong is facing acute urban decay. Statistics from the Legislative Council showed that 68.1 per cent of private buildings were aged 30 or above last year. Those aged 50 or above accounted for 25.7 per cent.

Secretary for Development Bernadette Linn Hon-ho said on Wednesday, when the government released details of the pilot scheme, that data over the past decade showed about 20 per cent of the new flats from all redevelopment projects came from the Urban Renewal Authority, with the remaining 80 per cent from private development projects.
“However, as redevelopment projects in old districts involve acquisition costs and there are certain constraints on development parameters for pursuing redevelopment in developed areas, market participation has remained sluggish,” she said.
Lin noted that buildings aged 50 years or above were increasing by more than 500 per year, and would grow by an annual average of more than 700 blocks in the coming 15 years.
“It is necessary for us to adopt an innovative and bolder policy to push the market to undertake redevelopment,” she said.


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Hong Kong’s rare plot incentive will help resurrect decaying districts, analysts say

Sham Shui Po (above), which has more borderline-case old buildings, could see faster redevelopment under the scheme than areas such as  Wan Chai, according to lawmaker Augustine Wong. Photo: Roy Issa

The rundown 13 Streets area in Ma Tau Kok contains roughly 2,500 flats and 418 ground-floor shops. Photo: Martin Chan

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Tsim Sha Tsui, Yau Ma Tei and Mong Kok in Kowloon. The Development Bureau will launch a two-month consultation over its proposal this month. Photo: Dickson Lee

Under the proposal, only residential plots of at least 700 square metres, with buildings aged 50 years or more and located in the seven designated districts will be eligible. Photo:  Sam Tsang

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Bonus plot ratio pilot scheme, which is intended to expedite private redevelopment in seven old districts, to be launched next month


Bonus plot ratio pilot scheme, which is intended to expedite private redevelopment in seven old districts, to be launched next month.


Hong Kong’s rare plot incentive will help resurrect decaying districts, analysts say

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Bonus plot ratio pilot scheme, which is intended to expedite private redevelopment in seven old districts, to be launched next month

Bonus plot ratio pilot scheme, which is intended to expedite private redevelopment in seven old districts, to be launched next month