Editorial | Hong Kong’s cash-strapped URA can build on bonds
- Overseas funding will help city redevelopment body tackle growing number of ageing buildings
The growing number of ageing buildings in Hong Kong makes redevelopment the only available option. The important task rests squarely on the shoulders of the Urban Renewal Authority (URA), whose job has been made more difficult by a weak property market and shrinking coffers.
The cash-strapped authority has risen to the challenge by tapping overseas funding and issuing bonds for the first time in many years.
The statutory redeveloper suffered a deficit of HK$3.5 billion (US$448.2 million) in 2022-23, the first in almost a decade. The shortfall crept further to HK$3.9 billion last year, including an operational deficit of HK$830 million and a HK$3.1 billion provision for projects already started that may be devalued.
The losses are not surprising given the weaker-than-expected recovery since the Covid-19 pandemic. But, unlike other commercial entities, the market-sensitive operations and rigid statutory mission of the URA mean there is much less room to manoeuvre.
With an array of projects costing more than HK$64 billion on the way and a cash flow of just HK$18 billion, the need for new funding is evident.
