Union Square

union_square
Project box

Geographical area: Asia and the Pacific

Location: Hong Kong, China

City size: XL (above 5,000,000 inhabitants)

Promoter: Regional Government of Hong Kong

Developer: Mass Transit Railway Corporation

Start year:

End-year:

Implementation phase: Completed

Project size: Neighborhood

Total area of intervention (in sqm): 135.000

Total investments (in USD): -

Project overview

The redevelopment project of Union Square targeted the requalification and upgrading of an important district in Hong Kong. The project focused on the reclamation of an area of 135,000 sqm from the sea to create new residential, commercial and office buildings. The regeneration initiative of Union Square stems from the necessity to relieve the high housing pressure experienced by the city, as the growing population brought to a sharp increase in the population density. In order to achieve this objective, the Regional Government of Hong Kong decided to reclaim the land of the Union Square site to develop a new high-density neighborhood. The initiative was started by the Regional Government of Hong Kong and the railway operator Mass Transit Railway Corporation, which partnered with private developers to conduct the implementation. The redevelopment of Union Square started with Hong Kong Airport Core Program, which planned the construction of a new international airport and its connection with an express train line through different stations across the city. The government developed the Hong Kong Airport Core Program to regenerate urban areas employing a transit-oriented development approach. This approach is based on exploiting the construction of new transportation hub to create a series of urban redevelopment projects in the surrounding area, developing new high-density and mixed-use neighborhoods. The Regional Government and the railway operator identified Union Square as one of the areas to host the new train stations. The Mass Transit Railway Corporation, the Transport and Housing Bureau and the Development Bureau of the Regional Government developed the masterplan for Union Square, assigned to English studio Terry Farrells and Partners. During the planning phase, the Regional Government of Hong Kong conceded the development rights to the Mass Transit Railway Company through a fixed-amount payment to start the renovation project. The Mass Transit Railway Corporation divided the entire land site into seven land parcels in order to achieve a mixed-use development. The Mass Transit Railway Corporation then sold the development rights to private developers through the establishment of public tenders. The appointed private developers stipulated direct agreements with the railway operator, which granted the leasing of development rights in exchange of a direct payment. In addition, these agreements detailed the division of assets ownership and profits between the railway operator and the private developer after the completion of the project. The planning phase of Union Square started in the early 1990s with the development of the Hong Kong Airport Core Program. The objective of the development program was to create a new international airport connected to different railway stations spread throughout the city, adopting a transit-oriented development approach in the construction of the stations. The project followed the Rail + Property development model, creating several railway stations across the city and providing mixed-use development with the construction of high-density residential buildings, offices, commercial spaces and public areas. The masterplan of the redevelopment of Union Square has been developed by the Mass Transit Railway Corporation in collaboration with the Regional Government of Hong Kong. The entire implementation of the redevelopment was overseen by the Mass Transit Railway Corporation to ensure the application of the masterplan and the quality of the construction. In addition, the railway operator conducted the construction of the railway station and the connected transport infrastructures. On the other hand, the private developers constructed the buildings appointed in each land parcel of Union Square. The construction works of the railway station concluded in 1998, while the buildings were completed in 2011. At the end of the project, Union Square saw the construction of 16 residential towers, 2 hotels, the International Commerce Centre hosting different offices, one commercial center and 17,000 sqm allocated for green areas and recreational activities. The redevelopment of Union Square had significant economic, providing 8,809 new housing units, increasing land and real estate values, creating new job opportunities, and attracting new businesses and tourists. Socially, it aimed to create an inclusive, sustainable community with mixed-use urban development, new services, improved mobility, and a reduction in traffic and pollution. Lastly, the project reclaimed the entire West Kowloon District, providing the city with a new space to absorb housing pressure. Despite these positive effects, the lack of social housing options and the exclusion of less dense urban areas to access the new transportation system brought severe criticism towards the redevelopment project.

The Union Square redevelopment has been guided by a principle of functional mix. On the total building area, 37% is allocated to residential functions, 29% to office spaces, 12% and 6% to hotels and commercial activities, respectively, and the remaining 16% to infrastructures connected to transportation. In addition, 17,000 sqm has been allocated to green areas and open spaces for recreational activities.

Benefits

The upgrading and redevelopment of Union Square brought significant economic effects to the local community and the surrounding areas. The newly constructed building complexes provided 8,809 new housing units to accommodate new residents and alleviate the high housing pressure of the city. The creation of several residential, commercial and office buildings significantly increased the land and real estate values in the areas surrounding the station and the newly built complexes. The redevelopment project also created new job opportunities through the provision of commercial spaces for local activities and businesses relocating in the area and attracted both foreign and local companies to the area due to the spaces dedicated to offices. Additionally, the direct connection from the station to the airport and the creation of new urban landmarks increased the tourist influx both in the district and throughout the city.

Despite not being the main objective of the redevelopment, Union Square brought some positive environmental effects. Firstly, the redevelopment prompted to the reclamation of the entire West Kowloon District recovering an area of 3,400,000 sqm in total. In addition, the redevelopment provided a total area of 17,000 sqm of urban green areas. Lastly, the project developed the new buildings focusing on improving their energy efficiency. In this context, the International Commerce Centre acquired the BREEAM In-Use certification achieving the Outstanding rating.

The redevelopment of Union Square targeted the creation of a more sustainable community and created a self-sufficient district focused on mixed-use urban development. The project provided new services, business activities, residential options and recreational spaces for the residents of the area and the surrounding districts. In addition, the redevelopment focused on improving mobility. The project provided the area with a newly built train station connecting the district with the rest of the city and creating a direct connection with the international airport. The station works also as an interconnection between the existing railway lines and the two new train lines implemented with the project. The creation and expansion of the train lines reduced the usage of private cars and significantly improved sustainable mobility options. Consequently, the minimization of private cars led to a significant reduction in traffic and congestion within the district and nearby areas. Ultimately, this reduction improved the quality of life for the residents by lowering the level of transport-related pollution and reducing road accidents. Despite these positive effects, the project received strong criticism as the redevelopment only considered areas with high population density. Therefore, it excluded less dense urban areas from being targeted, limiting their access to the newly developed public transportation. In addition, there has been criticism regarding the exclusive focus of residential development on market-oriented housing. The project did not provide any social or subsidized housing options, therefore excluding lower-income families from accessing the newly developed buildings.

The International Commerce Center in Union Square achieved the BREEAM In-Use certification with a rating Outstanding.

Finance model

The funding sources of the Union Square redevelopment project come from both public and private actors. From the public side, the Regional Government of Hong Kong and the railway operator Mass Transit Railway Corporation participated to the project funding using public resources From the private sectors, private developers directly funded each development project to which they were selected through public tenders.

The redevelopment of Union Square employed different financing instruments mainly including equity from private developers and value capture instruments employed by both the Regional Government of Hong Kong and the Mass Transit Railway Corporation. The Regional Government of Hong Kong participated in financing the redevelopment of Union Square by conceding the development rights to the railway operator Mass Transit Railway Corporation for the development of the selected areas. The Mass Transit Railway Corporation paid a ‘before-railway’ land price to the Regional Government of Hong Kong to receive exclusive development rights on the site. Then, the Mass Transit Railway Corporation sells the development rights to private developers through public tenders for a period of 50 years, receiving an ‘after-railway’ payment. In addition, the Mass Transit Railway Corporation reinvested the revenues generated from the project to finance the operational and management costs of the train station and the infrastructures. From the private sector, private developers employ private resources to participate in the public tenders of the Mass Transit Railway Corporation to acquire the development rights and finance the total costs of the redevelopment project. Private developers employed both private resources and debt instruments.

References and Credits

BRE Group. BREEAM rating Outstanding for International Commerce Centre, Hong Kong. Accessed on 31/07/2024.Available here.

SUR Lab Bocconi (2023). Deliverable ATM 2.

Image from Jimmy Lau, retrieved here. Used under Content License.