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The following is issued on behalf of the Housing Authority:
The Housing Authority's (HA) Commercial Properties Committee (CPC) today (October 24) approved a set of arrangements for tenants affected by the clearance of Kwun Tong Factory Estate.
Under the arrangements, tenants and genuine operators will be given 18 months' notice to vacate their premises and will have rent frozen from the date of announcement. They will be offered three months rent-free period when leasing other HA factory units or a cash sum of $4,900 per unit.
Most of the affected tenants are offered Ex-gratia Allowances (EGAs) ranging from about $80,000 to $620,000, which are equivalent to about eight to 11 years' existing rents payable. An advance payment of 70% of the allowances will be paid on application, with the balance to be paid after delivery of vacant possession.
"Both the tenancy agreement and the Housing Ordinance entitle the HA to terminate factory tenancies on giving due notice," the Chairman of CPC, Mr Liu Sing-cheong said.
"Although displaced tenants are not legally or contractually entitled to any form of compensation, as a responsible and reasonable landlord the HA offered EGAs to assist their relocation," Mr Liu said.
"The EGA payments have taken into account the dual elements of disturbance including removal cost, rental during fitting-out of new premises and fitting-out costs; and an amount to buy-out the tenant's assignment right," he said.
There are now 169 remaining tenancies at Kwun Tong Factory Estate occupying 309 units, out of which about 108 are in active use. Under an Early Surrender Scheme, 212 tenants holding 468.5 units have already surrendered their premises.
"Those who wish to re-establish business may participate in the open tender or restricted tender exercises for the newer HA factories, where about 4,000 square metres are currently available," Mr Liu said.
"Tenants may alternatively choose to relocate to factory units in the private sector. The Rating and Valuation Department's Property Review for 2006 records that there was about 1.3 million square metres factory space vacant in the private sector by the end of 2005," he added.
Built in 1966, Kwun Tong Factory Estate comprises two seven-storey blocks without lift service. There are 817 factory units with standard sizes of 24 square metres.
In March 2005, HA's Strategic Planning Committee endorsed the clearance of the four older factory estates ranging from 30 to 46 years old, namely Tai Wo Hau Factory Estate, Kwun Tong Factory Estate, Kowloon Bay Factory Estate and Chai Wan Factory Estate in phases with the sites to be returned to the Government for disposal after clearance.
Ends/Tuesday, October 24, 2006
Issued at HKT 17:10
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