West Kowloon Cultural District Cautioned Against Relying on Property Sales for Funds
An academic has warned that the arts hub's strategy of selling flats to plug its financial shortfall is risky.
An academic on Friday cautioned the West Kowloon Cultural District against relying on selling property to plug its financial shortfall.The authority that runs the arts hub says its original government grant will run out in two years and it will not request more public money.
It is asking the government to approve a new funding plan, which is expected to include revenue from selling flats at the site.But Simon Lee from Chinese University's Asia-Pacific Institute of Business told Commercial Radio that such an approach is risky.
"They're almost at a dead end. How much money could they sell [properties] for, now that the market is in such a bad state? And can they operate in a sustainable manner with that money?" he asked."This is not a continuous source of income coming from operations, like admission and parking fees at M+ and the Palace Museum.
These [properties] can only be sold once and it's dangerous to do so."Under the existing arrangement with the government, the West Kowloon Cultural District Authority can only rent out its properties, but cannot sell them.Lawmaker Andrew Lam told an RTHK programme that if the body had to break the no-selling rule, it might as well apply to expand the housing area limit. Currently, only 20 percent of the cultural district area can be used for residential development.
"The commercial property market, whether it's in the world or Hong Kong, will be tough in the next few years. Using the portion [of land] for commercial property to build flats will be a better solution for this urgent situation," he said.Lam said the authority could also look into raising the floor area ratio, saying development at the cultural hub is rather low density compared to neighbouring projects.