Property owners, investors and developers are taking advantage of a recent policy relaxation by the Hong Kong government, to convert old industrial buildings for commercial purposes, as reported by South China Morning Post.
This policy was announced by Chief Executive Carrie Lam Cheng Yuet-ngor in October 2018. It is aimed to revitalise industrial buildings built before 1987, which could be converted for commercial use with up to an extra 20 per cent in gross floor area. This could result in higher rents and resale prices for owners, while easing the tight vacancy environment in the office market.
The first project following this policy is the redevelopment of Maxwell Industrial Building in Kwun Tong, by textiles company Lawsgroup, which received approval from the city’s Town Planning Board in March 2019. Demolition works began in early April, and work is expected to be completed in 2022, according to chief executive Bosco Law Ching-kit.
The industrial building will be redeveloped into a 33-storey office for leasing. Under the new policy, Lawsgroup will gain an additional floor area of 40,000 square feet, for a total of 270,000 square feet, after paying a premium for conversion of land use.
The value of transactions involving industrial buildings has surged by more than 13 per cent to HKD60.4 billion in 2018, from HKD53.2 billion in 2017, while the number of transactions jumped by 11 per cent to 5,620 deals last year, according to Hong Kong-listed industrial and commercial property agency Midland IC&I. — Construction+ Online