Hong Kong’s West Kowloon arts hub secures HK$3 billion, 10-year loan facility

The authority managing Hong Kong’s West Kowloon arts hub has averted a funding crisis after securing a longer-than-usual 10-year loan facility of HK$3 billion, which comes in addition to a US$1 billion (US$383.8 million) bond sale programme announced earlier. The financing would provide a much-needed lifeline to the West Kowloon Cultural District Authority in the coming decade before its residential property development could start to generate income, board chairman Bernard Chan said on Friday. “The loan facility will bridge a funding gap, and the significance is that the bank is confident about our future ability to make money,” Chan said. The authority said it had signed the HK$3 billion, 10-year loan facility agreement with the Industrial and Commercial Bank of China (Asia), or ICBC. The duration is unusually long, as such deals are normally five years in the city. ICBC (Asia) chairman and executive director Liu Yagan said that along with the authority the bank hoped to add more financial momentum to the soft power of Hong Kong and the country as a whole. The West Kowloon Cultural District includes the M+ modern art museum and Hong Kong Palace Museum, and they will be joined by the WestK Performing Arts Centre later this year. The hub is part of a bigger development at West Kowloon to be positioned as the city’s second central business district. Betty Fung Ching Suk-yee, the authority’s CEO, said a relatively stable source of rental revenue from commercial properties would start in 2027 when the Artist Square Towers project was completed. The development will include retail, dining and entertainment offerings, in addition to office towers, across 65,000 square metres of space. But a bigger source of income will come from the authority’s housing development spanning 108,500 square metres, allowing for as many as 1,995 homes. The housing project was made possible when the government approved a change to the art hub’s funding model in 2024 to resolve the financial crisis. Chan said the authority aimed to finish drafting tender documents for the residential project this year, pending the government’s approval and a timetable of sale. “The residential property project will provide longer term income, but it is a long process and cannot be done in the short term,” he said. “That’s why the loan facility is so important to us.” He pointed out that the arts hub funding model was similar to that of the MTR Corporation, which used property developments above rail stations to help fund its train services. In the 2025, 2024 and 2023 financial years, the authority recorded an underlying operating deficit of HK$769 million, HK$578 million, HK$718 million respectively. On Thursday, the authority filed documents with authorities to issue as much as US$1 billion in bonds in series and tranches. “If market conditions allow, we can issue bonds for fresh funding,” the authority’s chief financial officer, Carmen Lee, said. She added the authority had taken reference from other local entities that sold bonds, such as the Urban Renewal Authority and HK Electric.