Lease Modification of Industrial Lots & Ways to Utilize Vacant Industrial Areas
by Raymond Ho 03.05.2003
Structure of Presentation
Obsolescence of “I” area Existing Measures Undertaken Lease Modification Problems Facing and Solutions Feasibility of other uses Conclusion
Obsolescence of “I” Area
In 2001, -Drop in price and rent: 13% and 9% In 2002, - take-up of private flatted factories: -447,000m² - Vacancy: 10.9%, 65% of which located in Tsuen Wan, Tuen Mun and Kwun Tong - By year 2016, estimated surplus: 4.2 million m²
Utilize vacant “I” area Urgent!!
Existing Measures undertaken
1.
2. 3.
4.
5.
Planning Department -- change guidelines/rezone Considerations: District planning intention Surrounding land uses Environmental and traffic conditions Community and infrastructure provision Redevelopment potential
Changing of Col. 1/Col. 2 Uses
I/O buildings Lease modification cases of “I” to “I/O” Ambiguous
X
Difficult to enforce in case of breaching lease conditions
Inclusion of I.T. /Telecommunication - TPB included in Col 1in 2001 - Apply waiver
Rezoning
R(E) e.g. Yau Tong, Aberdeen
– Preferably at the fringe of “I” area – Special design/environmental mitigation – Concern: marketability and suitability
X Interface problem, living conditions……
Rezoning
-
CDA e.g. Ma Tau Kok, Tsuen Wan Cluster of obsolete buildings larger scale of redevelopment Flexibility and better planning scattered obsolete “I” buildings and multiple ownership
X
Rezoning
-
OU(B) – e.g. Kwun Tong, Aberdeen,Cheung Sha Wan TPB introduced in 2001 Cluster of I/O buildings Convenient locations As a buffer zone
OU(B)
-
-
Planning Intention: “employment” zone for clean industrial, general office and commercial uses. Flexibility Usually in Col.1 : restaurant, retail, nonpolluting industrial, office…..
conversion process non-stop valuation process!!
•Enhance
Lease Modification
I OU(B) uses User: Industrial/godown purposes non-residential (excl. e.g. hotel, petrol filling station and residential care home) Valuation Concern
Problems and Possible Solutions
Current Government Land Premium Policy - Huge amount of land premium - Long negotiation process Encourage redevelopment by premium reduction?
Real problems behind….
Multiple ownership Financial viability
to urban decay Rezoning – a good start but missed the economic booms in 90’s
Similar
Possible Solutions
Standard rates - increase transparency and certainty more incentives X Difficult to determine the rates Propose a broader base and review periodically
Possible Solutions
Pay by instalments Loan schemes Facilitators Government take-up
X ineffective and money consuming Minimum government intervention
Feasibility of other uses
Hotel - Col. 2 in some places, e.g. Kwun Tong X secondary locations X expected completion: 17,000 rooms in 2003-2005 potential problem of over-supply
Feasibility of other uses
a. b. c.
“loft” concept/home-office - bad living conditions Vertical-mix multi-use towers - e.g. retail, parking, hotel, office, amenities, institution and entertainment Advantages: Increasing revenue Better urban environment Integrating public uses
Potential Problems
Extreme compact Compatibility Infrastructural capacity Adequacy of community facilities Fire safety, hygiene….
Conclusion
Obsolescence of “I” area Multiple ownership and financial viability Minimum government intervention Ways to enhance conversion
~END~ Thank you!