Hong Kong's government has bolstered its commitment to urban renewal by granting two residential sites valued at HK$13.2 billion to the Urban Renewal Authority (URA), S&P Global Ratings said in a Monday release.

The move cements the URA's critical role as the city's sole urban renewal developer, the rating agency said.

The land injection will enhance URA's financial sustainability and asset base, improving its saleable resources without requiring large conversion spending.

The grant will also improve the authority's liquidity and boost its ability to manage its urban renewal projects, S&P said.

Although recent tendering activities show increased liquidity, a weak property market and high acquisition costs will continue to weigh on URA's profitability, according to the rating agency.