The Urban Renewal Authority will spend about $3.8 billion to turn Peel Street/Graham Street in Sheung Wan into Hong Kong's first "Old Shop Street".

Measuring a total site area of about 57,240 square feet, the project is bounded by Peel Street, Graham Street, Gage Street, Wellington Street, Cochrane Street, Gutzlaff Street, Staveley Street and Kin Sau Lane in the Central & Western district.

Regeneration: The preliminary concept plan for "Old Shop Street" and the open market.

The authority has today issued offer letters to owners of 361 property interests in 37 old buildings affected by the redevelopment.

Buildings in the redevelopment area were constructed predominantly in the mid 1950s and early 60s, except for four pre-war buildings which the authority intends to preserve for adaptive re-use.

The authority intends to regenerate the area with the creation of an "Old Shop Street" as well as the provision of a multi-purpose community hall of 13,500 square feet and about 17,000 square feet of quality open space for the enjoyment of the community.

Those owners of domestic properties who qualify as owner-occupiers will be offered $8,508 per square foot of saleable floor area. The acquisition offers are based on the Government's Home Purchase Allowance policy, the authority said.

Incidental cost allowance available

Affected owners will have 60 days to consider the authority's offers. In addition to the acquisition offers, owners will receive an incidental cost allowance, where applicable, as an incentive for them to accept the offers within the 60-day period. This allowance serves as a subsidy for the removal and various other expenses normally incurred in the purchase of a replacement flat.

The current incidental cost allowance for owner-occupied domestic property is $106,400 or $98 per square foot ($1,050 per square metre) of saleable floor area, whichever is higher. For domestic property that is tenanted or vacant, the allowance is $83,600.