Hong Kong’s manufacturing and light industry boom in the 1970s and 80s coincided with our flourishing economy at the time, as well as with the growth of a whole generation of Hongkongers. With Hong Kong’s transformation in economic structure, the focus of our economic activities has shifted from a conventional manufacturing to a service sector base. Nonetheless, many industrial buildings in old industrial areas are still providing space for different industrial-related economic activities. Over the past decade or so, we have been reviewing these precious land resources, and some of these “Industrial” (“I”) areas (particularly those located in metro areas) have been rezoned to “Other Specified Uses” annotated “Business” (“OU(B)”) or residential uses to facilitate the transformation of old industrial areas as required today. Privately owned industrial buildings in old industrial areas still take up most of the gross floor area (GFA) among the various types of buildings that are used for economic activities in Hong Kong.
Since 2000, the Planning Department (PlanD) has undertaken four rounds of “Area Assessments of Industrial Land in the Territory” for old industrial areas, and the latest findings of the 2014 Assessments were announced last week. The 2014 Assessments cover 75 industrial areas with a total land area of about 510 hectares, involving 1 448 privately owned industrial buildings with a total GFA of about 28 million square metres under five land use zonings, namely “I”, “OU(B)”, “Residential (Group A)”, “Residential (Group E)” (“R(E)”) and “Comprehensive Development Area”. The purpose of the assessments was to examine the latest usage of industrial buildings in old industrial areas with a view to facilitating the future planning of industrial land and optimising the use of our land resources.
According to the 2014 Assessments, the overall vacancy rate of industrial buildings in old industrial areas is 5.3 per cent. There have been obvious decreases in the vacancy rate of industrial buildings in “Industrial” and “OU(B)” zones, which have decreased from 6.5 per cent to 3.5 per cent and 8.4 per cent to 6 per cent, respectively between 2009 and 2014. This highlights the fact that there is still a considerable demand for industrial floorspace in Hong Kong. The assessments also reveal that about half of the floorspace in industrial buildings is currently used for Manufacturing/Workshop and Warehouse/Storage, while the remaining is for Office and “Other Uses”. Apparently, we still need to provide sufficient floorspace in industrial areas to make available space for livelihood-related industrial activities, such as food products/beverage manufacturing and processing, printing and logistics, and more.
In addition, there are more economic activities, and even emerging industries, opting for floorspace in industrial buildings in recent years. Examples include showrooms, data centres, research and development/testing centres, cultural/creative art studios, or even hydroponics and aquaculture, and more. The 2014 Assessments show that these “Other Uses” currently occupy about 5.1 per cent of industrial floor space, thus suggesting a rising trend. Apart from relatively lower rents and good accessibility, this may also be attributed to the generally more spacious and higher ceiling design of the industrial units, which offers more flexible development space for start-up businesses or emerging activities. Consequently, it has been recommended to explore, on the premise of satisfying all fire and building safety requirements, further relaxation of the restrictions on non-industrial uses to make better use of existing industrial buildings.
Nowadays, various thriving economic activities in industrial buildings employ over 400 000 workers, forming an essential part of our diversified economy and employment market. Moreover, industrial areas still zoned “I” are mostly located in new towns. We have to consider the geographical location of different industrial areas to achieve a balance in the distribution of population and jobs and to meet the needs of our social and economic development in the long run. At the same time, the overall market demand for industrial building floorspace is projected to rise, in particular the demand for general warehousing driven by the logistics industry, so much so that there may be a shortfall in supply. As such, we recommend duly adjusting the planning strategy for industrial land and retaining most of the existing “I” and “OU(B)” areas, while formulating the most suitable planning objectives and strategy according to the needs and actual circumstances of the different areas, taking into account factors such as the existing usage, development potential, the trend of transformation, redevelopment opportunities, and more. Let me explain using the following three areas as examples:
(1) Industrial areas at Siu Lek Yuen and Fo Tan in Sha Tin
In response to the latest findings on the society’s demand for industrial buildings, as well as the latest development of the industrial areas in Siu Lek Yuen and Fo Tan, including the usage of industrial buildings therein, we have decided to revise the rezoning proposals for the Siu Lek Yuen industrial area to “R(E)” and some sites in the Fo Tan industrial area to “OU(B)” as recommended in the previous round of Area Assessments, and to retain the “I” zoning of these two areas.
(2) Industrial areas in Chai Wan Kok, Tsuen Wan and Ap Lei Chau West, Southern District
Taking into account the gradual transformation of these two areas, we recommend rezoning the both to “OU(B)” to further facilitate their transformation and provide a wider variety of jobs.
(3) Industrial area in On Lok Tsuen, Fanling
To enhance the current site utilisation and encourage private redevelopment opportunities, we recommend identifying suitable government sites in the area for commercial/office and/or logistics/warehousing, as well as relaxing existing development restrictions on the relevant Outline Zoning Plan, pending technical assessment on its feasibility.
As for the revitalisation measures for industrial buildings launched in April 2010, the Lands Department had received, by the end of July this year, a total of 161 applications for redevelopment or wholesale conversion of industrial buildings under the measures, of which 112 have been approved. Most of the wholesale conversion applications approved are located in Kwun Tong and Kwai Chung, and the proposed new uses mainly include offices, eating places, shops and services, and hotels. The approved applications for redevelopment are situated mainly in Kwun Tong, Yau Tong, Cheung Sha Wan, Kwai Chung and Wong Chuk Hang, and the proposed new uses after redevelopment include residential, commercial and hotel. As evidenced by the aforementioned assessments, the overall vacancy rate of industrial buildings has seen a decline and industrial areas are undergoing gradual and steady transformation. The revitalisation measures have apparently contributed to optimising the use of industrial floorspace and facilitating the transformation of the old urban industrial areas. It is time for the market to resume control of the conversion and redevelopment of industrial buildings. Consequently, the Government will not extend the deadline for the revitalisation measures. In other words, application for the related special waivers and lease modifications will close on March 31, 2016.
Industrial land can provide space to support the sustainable development of Hong Kong’s diversified economy. Apart from reviewing existing industrial land in old industrial areas, we will also, through a study known as “Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030” conducted by the PlanD, holistically review the supply and demand of all economic land use, including industrial land, and closely monitor Hong Kong’s future demand for economic land to formulate an appropriate strategy for spatial development. With a timely and responsive planning strategy, we can make better use of our precious industrial floorspace and vibrantly rejuvenate our industrial buildings.
16 August, 2015
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