The new package of measures to facilitate redevelopment and wholesale conversion of industrial buildings as announced by the Chief Executive in his 2009-10 Policy Address would provide suitable land and premises to meet Hong Kong's changing economic needs, the Secretary for Development, Mrs Carrie Lam, said today (October 15).
Speaking at a press conference to elaborate on the measures, Mrs Lam said that the transformation of Hong Kong's industrial areas and buildings had not kept pace with the economic restructuring and relocation of traditional manufacturing activities to the Mainland since the early 1980s.
"As a result, many private flatted industrial buildings are left vacant or under-utilised," she said.
There are now 1,467 private industrial buildings in the metro areas and new towns in Hong Kong with a total floor area of 17.4 million square metres. As at end-2008, about 6.5% of the area, or more than 1.1 million square metres, was left vacant.
"Located in urban areas with available infrastructure and good public transport, the sites currently occupied by some of these industrial buildings are very suitable for alternative uses. Indeed, all the former industrial areas in Kowloon (such as Kwun Tong, Cheung Sha Wan, Mong Kok, San Po Kong, Kowloon Bay, etc.) have been rezoned over the years into other uses, notably OU(Business). This land use zoning could accommodate the great majority of activities in the six economic areas identified by the Chief Executive's Task Force on Economic Challenges.
"The challenge before us is how to speed up the transformation process," Mrs Lam said.
Explaining the four initiatives announced in the Policy Address, Mrs Lam said that these were devised to overcome current problems prohibiting or slowing down the transformation, such as multiple ownership, development intensity, land premium or waiver fees.
The three measures to facilitate redevelopment are:
(a) to help unify ownership, lower the threshold from 90% to 80% for owners of industrial buildings situated in non-industrial zones and aged 30 years or above to apply to the Lands Tribunal for compulsory sale for redevelopment;
(b) to allow tailor-made lease modifications so that the land premium payable for the redevelopment of industrial buildings situated in non-industrial zones will be assessed according to the optimal use and proposed intensity of the redevelopment (i.e. "pay for what you build"); and
(c) to give owners seeking redevelopment through lease modification the option to pay the assessed land premium by instalments over five years at a fixed interest rate.
"Our industrial buildings are relatively young. With generally large floor plates, high ceilings, strong floor loadings, wide corridors and big lifts, they are very suitable for conversion into various alternative uses. Conversion is also a more environmentally friendly option.
"The challenge in this respect is how to ensure conversion takes place in a safe, effective and economical manner in order to release the potential of these buildings to support the new economic activities," Mrs Lam said.
"To achieve the maximum impact, we have taken the major step to allow owners to apply at a nil waiver fee for change of use of the entire existing industrial building for the lifetime of the building or the current lease period, whichever is earlier," she added.
The "nil waiver fee" concession is available to applications meeting the following criteria:
(a) industrial buildings aged 15 years or above and situated in "Industrial", "Commercial" or "OU(B)" zones;
(b) joint application by all owners of the buildings;
(c) there should not be any increases in building height, building bulk or GFA after the conversion;
(d) the building cannot revert to industrial use during the waiver period;
(e) full market premium is payable when the buildings are redeveloped in future.
Except for the lowering of the threshold for application under the Land (Compulsory Sale for Redevelopment) Ordinance which will be implemented via subsidiary legislation on a permanent basis, applications for the other three measures have to be made within a three-year period from April 1, 2010.
These measures can address the needs of economic development by enabling owners to revitalise and add value to their industrial buildings, thus providing new momentum for economic growth and creating jobs.
With the facilitating measures in place, the Government will encourage owners to jointly take forward their redevelopment or conversion plan. The Lands Department will set up a dedicated team to process applications for redevelopment or wholesale conversion of industrial buildings.
To ensure understanding of these measures, the Development Bureau will meet professional institutes, chambers of commerce, business associations, relevant District Councils, etc. in the next couple of months to answer any enquiries.
Ends/Thursday, October 15, 2009
Issued at HKT 14:58
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