Speech by Secretary for Housing, Planning and Lands on Legco motion on Assisting in the transformation of factory buildings
The following is a translation of the speech made by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in response to the motion on "Assisting in the transformation of factory buildings" in the Legislative Council today (January 31):
President and Hon. Members,
The motion moved by Hon. Mrs Selina Chow today urges the Government to assist in the transformation of traditional factory buildings to suit the present economic and commercial development. I thank Mrs Chow and the other 17 Members who have spoken on this subject for their valuable opinions. I agree that when formulating policies, the Government should keep pace with the times and act responsively to current needs.
With the structural changes in the industrial sector, industrial activities in Hong Kong have been shifting from manufacturing and production-oriented to more diverse management / service-oriented and information based since the 1980s. Despite the fact that the traditional industries predominated by production, manufacturing and assembling have been dwindling, some types of light industries are still active and have continued to contribute to Hong Kong's economy. We therefore cannot disregard the needs of these industries at all in planning the land use. As for existing industrial buildings, it has always been the policy objective of the Government to update our regulatory system in a timely and proper manner so as to achieve an optimum use of resources.
In response to Mrs Chow's proposal, I would like to first point out the measures we have formulated in updating the definition of "Industrial Use" and the use of "Industrial" zone to meet the needs of our economic and commercial development.
The Town Planning Board (TPB) reviews and updates land uses regularly in response to the social and economic needs. Apart from revising the statutory uses in the outline zoning plans, the TPB updates and extends the coverage of definitions of land uses according to actual needs. As early as in 1987, the TPB extended the definitions of "Industrial Use" to cover design, research and development in relation to industrial processes and allowed the setting up of trading firms which required large storage space and frequent loading/unloading and a limited number of ancillary offices in industrial buildings.
In 1997, the TPB included training in relation to industrial processes in the definitions of "Industrial Use" and further relaxed the control on uses always permitted in industrial building/land by allowing the ancillary office use of up to 50% of floor area and showroom use of up to 20% of floor area.
The definition of "Industrial Use" was further revised in 2001 to allow more uses in industrial buildings. These included manufacture, alteration, cleansing, repairing, ornamenting, finishing, adaptation for sale, breaking up, or demolishing or transformation of goods and materials; the storage, loading, unloading or handling of goods and cargo; or the training, research, design and development, quality control and packaging in relation to the above processes. As a matter of fact, the definition of "Industrial Use" adopted in town plans gives a far more extensive coverage than the definition of "Factory" under the Factories and Industrial Undertakings Ordinance.
The column of uses always permitted, i.e. uses which require no planning application, in "Industrial" zone, has been extended to cover "Office Related to Industrial Use", "IT and Telecommunications Industries" and "Research, Design and Development Centres".
Apart from updating and expanding the definition of "Industrial Use" and the permitted uses in the "industrial" zone, we have further introduced new land use zoning to allow greater flexibility in the use of existing industrial land. Since the introduction of the Other Specified Uses annotated "business" zone by the TPB in 2001, 200 hectares of industrial land have been rezoned for "Business" use. The redevelopment or conversion of old industrial buildings in "Business" zone for both commercial and clean industrial uses including office, IT, telecommunication industries and other creative industries requires no planning permission from the TPB. Application for hotel development at suitable locations in the "Business" zone is also allowed.
The TPB has further rezoned about 50 hectares of industrial land for other uses including "Residential (Group E), "Comprehensive Development Area" and "Commercial" uses. The aforesaid transformation has fully illustrated Government's flexibility and responsiveness to changing needs pursuant to the requirements of relevant policies and legislation.
Given that our longer-term objective to develop Hong Kong into a logistic hub in the Pearl River Delta Region, it is anticipated that there will be a significant increase in demand in the use of industrial land for storage/warehouse purpose in the long run. We propose that sites currently categorized as "Industrial" zone should continue to be retained for industrial purpose, except those abutting on residential or commercial land in urban areas which may be considered for rezoning for compatible uses with the surroundings. The TPB has agreed to this proposal. As for other areas, owners and stakeholders may apply to the TPB for rezoning their land for other uses pursuant to Section 12A of the Town Planning Ordinance. The TPB will consider their applications based on individual merits.
As can be seen from the above, it has been a long-standing policy that we assist in the transformation of old industrial buildings by means of planning. It is evidenced by facts that this has worked well. According to the Report on the Updated Area Assessments of Industrial Land in the Territory completed by the Planning Department in 2006, the vacancy rate of industrial buildings in the territory has been improving over the past few years. As at 1 April 2006, the utilization rate of private factory buildings was over 90%. The APM in Kwun Tong and Taikoo Place in Quarry Bay provide the examples of successful transformation of industrial buildings. These examples indicate that with appropriate transport infrastructure, timely updating of land use planning, market demand and the concerted effort of the industry, the transformation of old industrial buildings is perfectly achievable.
Hon Mrs Selina Chow has proposed to encourage overall planning of vacant factory buildings in old industrial areas at town planning level and develop theme areas for creative industries, electrical appliance cities and merchandizing cities. Firstly, "creative industries" cover a wide range of uses. Uses related to research, design and development of industrial processes, as I have just mentioned, are always permitted in town plans for "Industrial" and "Business" zones and no planning permission is required. Land owners are free to develop any creative industries they like.
I appreciate that Hon Mrs Selina Chow also hopes to assist owners as far as practicable in the transformation of their factory buildings for commercial purposes like developing them into electrical appliance cities, merchandizing cities, etc. Nevertheless, the transformation takes time and has to tie in with the supporting infrastructure and market demand. Some of the old industrial buildings are in the process of transition towards such a transformation. Individual owners may apply for partial conversion of their industrial buildings for commercial use. In processing such applications, the TPB must pay due regard for public safety. For instance, according to fire safety guidelines, there are potential risks for carrying out industrial and commercial activities within the same building because industrial activities may involve higher risks of fire and accidents and commercial activities may attract visitors not involved in any industrial activities in the building. To minimize the danger possibly brought about by hazardous incidences, it is necessary to require applicants to take corresponding safety measures.
In general, in the non-industrial portion on the lower floors of existing industrial or industrial-office (I-O) buildings in the "Industrial" zone and "Business" zone, "retailing and service industries" are uses always permitted and planning permission from the TPB will not be required if a buffer floor is provided in such a building to separate such proposed uses from the industrial uses on the upper floors and fire safety requirements are complied with. However, where a buffer floor is not provided, planning permission from the TPB will be required. In view of the safety concern as mentioned above, applications for change of use of lower floors of existing industrial and I-O buildings for "Retailing and service industries" must satisfy the fire safety requirements of the Fire Services Department (FSD), i.e. the aggregate commercial floor areas for buildings with and without sprinkler systems must not exceed 460m2 and 230m2 respectively.
The above-mentioned situation is not ideal. They are just transitional and temporary arrangements provided for the industry to facilitate gradual transformation of old factory buildings. In the long run, old factory buildings, on a whole building basis, will need to be converted for other development purposes. Our policy is to encourage all owners of the same old industrial building to apply jointly to the TPB for change of use of their building in whole for commercial use so that the restriction on commercial floor area under the above temporary arrangements can be relaxed. In this respect, Planning Department (PlanD), District Lands Offices and other departments have already provided clear guidelines. In sum, though we cannot force all owners of factory buildings to convert their building in whole for other purposes, we believe that market force will play its part and can successfully drive the transformation of traditional factory buildings.
I support Members' view that coordination among relevant departments should be enhanced and approving procedures should be streamlined. Our colleagues of various departments have also been working towards these targets. Regarding the procedures for change of land use, applications are processed by the TPB in accordance with the Town Planning Ordinance in a one-stop manner. Applicants do not need to submit their applications to different departments. Comments and requirements of various departments are considered in the process of handling planning applications.
Over the past two years, the TPB has considered a total of 240 planning applications for change of use of factory buildings, among which 181 have been approved. Applicants were rejected mainly because they failed to meet fire safety, building design and loading / unloading parking space requirements. Others were rejected for over-scaled development of proposed use, uses which may have adverse impacts on the surrounding environment, etc.
Apart from rezoning industrial sites for other uses by the TPB, the Lands Department (LandsD) has also introduced measures to facilitate applications for relaxing restrictions on the use of industrial buildings. The LandsD has simplified the processing procedures for approving short term waivers to facilitate industrial building owners to apply for converting their buildings for other uses. As long as the proposed use is in line with the relevant town plan or the planning permission is granted, and requirements of relevant departments are met, the LandsD will grant the short term waiver. At present, the LandsD generally needs only 3 to 5 months to grant a short term waiver. Applicants have to pay certain fees to reflect the increase in value of their property during the waiver period. They may appeal against the level of the fees assessed if it is not agreeable to them. The District Lands Office concerned will consider individual case based on the information and data provided by appellants.
Between January 2005 and November 2006, the LandsD received a total of 328 applications for change of use of factory building units / land. Over this period, 176 applications have been approved and 36 rejected. Reasons for rejection mainly include applications not supported by the TPB or other departments, withdrawal of application by applicants, unpaid administration fee or failure to provide sufficient information to the District Lands Office by applicants.
I would like to take this opportunity to mention a remark made by some Members that the LandsD had been too rigid in handling breach of lease conditions by factory building owners and that might not be useful in facilitating the transformation of factory buildings. I think I need to clarify on this. Once the LandsD detects unauthorized use of industrial buildings for commercial, office and showroom purposes during inspection or on receipt of complaint, the department will require the owner concerned to rectify the irregularity. If the owner is actively pursuing rectification actions, we will give the owner enough time to rectify the situation as well as to apply for change of use of his unit/land.
As Hon Mrs Selina Chow has suggested in her motion that the relevant departments should, strictly on the premise of meeting building safety requirements, streamline and expedite the processing and approval of applications by factory building owners for changing the use of land or factory buildings. We will enhance coordination among departments and review the approving criteria from time to time, in order to reduce unnecessary procedures, enhance transparency of the application process and shorten the time required.
We believe that the various measures being implemented have already met our industrial needs effectively, as demonstrated by the examples of successful cases I have just quoted. However, the redevelopment and transformation of old industrial areas as well as improvement of the vacancy rate of industrial buildings are subject to various factors such as market demand, multiple ownership, building structure, building services and fire safety consideration. To move with the times, we will continue to monitor and review the market demand for industrial sites to cater for the economic development of Hong Kong. In the process, we will continue to discuss with the industry the way to further expedite the transformation through market forces.
Thank you, President.
End/Wednesday, January 31, 2007