The West Kowloon Cultural District Authority is preparing to tender a prime residential site in the first half of next year as part of its efforts to alleviate growing financial pressures. The planned development, encompassing approximately 129,000 square metres in total gross floor area, will include around 108,000 square metres of residential space alongside 20,000 square metres designated for retail, dining, and entertainment facilities.

Property experts anticipate strong interest from major developers due to the site’s advantageous location and potential harbour views. Norry Lee, senior director at property consultancy JLL, highlighted the appeal of larger flats with sea views to wealthier buyers. He estimated the project could be valued close to HK$20 billion, based on prevailing accommodation prices of around HK$15,000 per square foot and recent transactions in the vicinity.

Lee noted the residential component would contribute the majority of the development’s value, with commercial space accounting for a smaller share. Should the authority secure the estimated HK$20 billion in proceeds and achieve a 5 percent return on investment, it could generate approximately HK$1 billion annually. This amount would roughly offset the authority’s reported operating deficit, which reached nearly HK$1 billion for the 2025-26 fiscal year, marking a 30 percent increase from the previous year despite a 19 percent rise in self-generated operating income to a record HK$768 million.

However, Lee and other experts cautioned that relying on land sales offers only a temporary financial reprieve. “If it is a land sale, it is a one-off,” Lee said, stressing the importance of how funds are managed post-sale. Investing the proceeds to generate sustainable, recurring income would be critical to supporting the district’s long-term operations.

The authority plans to secure upfront payments upon awarding the Zone 2B project, followed by instalments as development progresses. To bridge funding gaps before commercial income from the district materializes, the authority has taken on debt, including a HK$3 billion 10-year loan facility from ICBC (Asia) and two five-year bonds totaling HK$700 million.

Andrew Lam Siu-lo, a lawmaker, town planner, and former board member of the authority, emphasized that property income has been an integral part of the district’s financial model since its inception. He described the property market’s recent stabilization as a positive sign for the tender’s prospects but underscored the need to differentiate capital funding from ongoing operating expenses. According to Lam, proceeds from property sales might first be channeled toward completing remaining facilities, with any surplus potentially aiding day-to-day operations.

Lam further stressed that sustainable revenue could not depend on one-time land sales and highlighted the necessity of growing core revenue streams such as ticket sales, sponsorships, and cultural merchandise. He also dismissed the expectation that cultural institutions could fully cover their costs through income generation alone, noting this challenge is common worldwide, including for government museums and performing arts venues.

Supporting this view, cultural policy advocate Ada Wong Ying-kay, who participated in several early development committees of the district, argued that critiques of the district’s finances have been unduly harsh. She pointed out that public funding for cultural institutions under the Leisure and Cultural Services Department has long been accepted without expectations of full cost recovery. Considering West Kowloon’s current cost recovery rate of about 40 percent, Wong described the district’s financial performance as “amazing.”