The Hong Kong government has increased the Urban Renewal Authority’s borrowing limit to HK$35 billion to allow it to raise more funds to finance operations, with the body recording an annual deficit of about HK$2.7 billion, its third straight loss.
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The cash-strapped statutory body also said on Monday that it would review and introduce a more comprehensive compensation mechanism to cut its acquisition costs for redevelopment and provide better rehousing options for affected owners.
Authority chairman Chow Chung-kong said he was “not too optimistic” about profits in the current 2025-26 financial year ending next March, while the body recorded a deficit of HK$2.72 billion in 2024-25.
The figure comprised an operational deficit of HK$41 million and HK$2.68 billion in impairment provisions as a result of the market downturn. The body recorded a net asset value of HK$43.6 billion and a cash flow of HK$21.2 billion.
“The body is still financially sound … We will take forward projects that have relatively small scale ownership but provide greater planning benefits when combined with other ongoing projects,” Chow said.
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Managing director Donald Choi Wun-hing said the authority had immediately checked the market situation last week after the government revealed that it would increase the body’s borrowing limit from HK$25 billion to HK$35 billion.