A view of the To Kwa Wan redevelopment site. A tenement building near the site, on Ma Tau Wai Road, collapsed in 2010, killing four people and injuring two others. Photo Provided to China Daily

Occupants of some 116 flats and 15 shops in To Kwa Wan are to make way for a HK$1.2-billion redevelopment project which the Urban Renewal Authority (URA) estimates will be a loss amid soaring construction costs.

The URA announced the ground-breaking on Friday for the project - a 30-story building to be built at the junction of Chun Tin Street and Sung Chi Street to provide 150 apartments of below 500 square feet each, along with a three-story, 1,400-square-meter commercial arcade.

The site currently takes up an area of 1,226 square meters, with buildings of almost 60 years old.

The URA said a survey on the "freezing" of the properties involved was being conducted on Friday, to be followed by a briefing for the landlords and tenants next week.

"If we calculate the project's costs based on current market prices, it's very likely we'll see a deficit," said Ian Wong Wai-kuen, director (acquisition and clearance) of the URA.

"It takes a long time to redevelop the project completely, while construction costs are rising," he said.

"It's still unknown whether we can make the best use of the plot ratios," Wong said, adding that the amount of the projected loss could only be ascertained after the survey is completed.

A tenement building on Ma Tau Wai Road, To Kwa Wan, collapsed on Jan 29, 2010 - near Chun Tin Street - killing four people and injuring two others. A redevelopment project began at the site a month after the tragedy, but it did not include Chun Tin Street despite appeals from some residents.

"We did consider the requests of Chun Tin Street residents, but we had to give priority to the people affected by the building collapse," Wong explained.

As to whether the URA will participate in developing further sales of subsidized apartments, Wong said discussions on the issue are on the agenda for the next few months.

In the private housing sector, more than 74,000 flats will be released in the next three or four years, Secretary for Development Paul Chan Mo-po said.

The government reiterated its housing target of providing 74,000 housing units within three or four years in the Chief Executive's Policy Address on Wednesday.

"After people have moved into the new apartments, their old apartments can be put onto the secondary market for sale or rent to boost the overall supply," Chan said.

agnes@chinadailyhk.com

(HK Edition 01/17/2015 page6)