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LCQ19: Revitalisation of industrial buildings

Following is a question by the Hon Ma Fung-kwok and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (October 22):

Question:

Since April 2010, the Government has implemented a series of revitalisation measures to facilitate the redevelopment and wholesale conversion of old industrial buildings (revitalisation measures). There are views that the revitalisation measures have boosted the transactions of industrial building units and caused the rentals of these units to rise continuously. As a result, those arts workers and arts bodies that are currently renting these industrial building units are facing the problems of escalating rentals or forced removal, etc. In addition, some arts and sports groups have respectively relayed that the existing fire services and town planning legislation are obsolete, posing a lot of restrictions on them when they carry out activities in industrial buildings. In this connection, will the Government inform this Council:

(1) of the number of applications received by the authorities so far for changing the uses of industrial buildings, and among such applications, the respective numbers of approved and rejected applications; of the reasons for some of the applications being rejected;

(2) whether the new uses involved in the approved applications include the use for "Place of Recreation, Sports or Culture", and list a breakdown of the number of approved applications by the new uses; 

(3) whether it has collected data, since the implementation of revitalisation measures, on the overall changes in the per-square-foot price, per-square-foot rental and vacancy rate of industrial building units in the entire territory and individual districts; if it has, of the details; if not, the reasons for that;

(4) whether any arts or sports group has sought the authorities' assistance regarding the restrictions imposed on their carrying out of activities in industrial buildings by the existing fire services and town planning legislation; if so, of the measures put in place by the authorities to assist them; whether they have plans to relax such requirements so as to allow creative, arts, music, sports and recreational activities to be carried out in industrial buildings; if they have such plans, of the details; if not, the reasons for that;

(5) whether it has comprehensively assessed the effectiveness of the revitalisation measures implemented so far, including whether the original objectives have been achieved, as well as the positive and negative impacts of these measures on land supply, commerce, culture and arts, etc.; if it has conducted such an assessment, of the outcome; and

(6) given the comments that the revitalisation measures are ineffective, whether the authorities will consider amending or even abolishing such measures with a view to mitigating the negative impacts on those bodies carrying out arts and sports activities in industrial buildings; if they will, of the details; if not, the reasons for that?

Reply:

President,

The Government announced in October 2009 a series of revitalisation measures to facilitate redevelopment and wholesale conversion of old industrial buildings with a view to providing more floor space to meet Hong Kong's changing social and economic needs. These measures have been implemented since April 1, 2010. Subsequently, refined measures were implemented in April 2012 and February 2014, including the extension of application period to March 31, 2016.

My reply to the various parts of the questions is as follows:

(1) As at end September 2014, the Lands Department (LandsD) had received 141 applications for redevelopment or whole conversion of industrial buildings under these measures, of which 100 applications had been approved. Applications that do not meet the relevant stipulated requirements, e.g. the application site does not fall within the designated zones of the statutory town plan, will be rejected. So far, five applications were rejected since the implementation of the measures. 

(2) The new uses of the revitalised industrial buildings are proposed by the applicants. LandsD will process the applications in accordance with the proposed uses. There is no requirement for the applicants to apply for any specific uses under the revitalisation measures. In general, new uses across various aspects are proposed in the applications. Among the approved cases, the major proposed new uses include office, eating place, shop and services, and hotel. The approved cases, upon execution of the relevant land documents, will be registered in the Land Registry. Key information, such as location and user, of the cases will also be accessible to the public through the website of the LandsD after completion and registration.

Among the 100 approved cases, 17 applications under the wholesale conversion of industrial buildings can allow for the use of "Place of Recreation, Sports or Culture" (of which 3 applications were subsequently withdrawn after approval and the remaining 14 applications had executed the special waivers). And, another 14 approved redevelopment applications are for non-industrial or non-residential uses (of which 5 applications were subsequently withdrawn after approval). The relevant user clause can allow the use for "Place of Recreation, Sports or Culture". The actual provision of such place of recreation, sports and culture as permitted under the relevant land documents would depend on the development plan of the lot owners.  

(3) The Rating and Valuation Department (RVD) compiles rental and price data on private flatted factories each month. The data are published in the monthly publication "Hong Kong Property Review - Monthly Supplement" which is uploaded onto the RVD's website for public information. The rental and price statistics from April 2010 to August 2014 (the latest) are at the Appendix.

RVD conducts vacancy survey every year to provide a snapshot of the year-end vacancy position of various types of private properties. The vacancy data are published in the annual publication "Hong Kong Property Review" which is uploaded onto the RVD's website for public information. The vacancy rates for private flatted factories as at the year-end of 2010, 2011, 2012 and 2013 are 6.7 per cent, 6.0 per cent, 5.0 per cent and 5.8 per cent respectively.

(4) The Home Affairs Bureau (HAB) has been supporting and promoting arts and cultural development from the policy perspective. During the normal contacts and exchanges with arts groups and artists, HAB has chances to listen to the difficulties that the sector is facing in carrying out art activities. HAB would convey the views to relevant departments as appropriate.  

In order to facilitate the transformation of Hong Kong's industries, the Town Planning Board (the Board) has expanded the scope of uses to be permitted in the "Industrial" (I) zone to allow for more flexibility in the use of existing industrial and industrial-office (I-O) buildings, including permitting the uses related to creativity and music to be carried out in such buildings, such as audio-visual recording studios and design and media production offices. However, in view of fire safety considerations, such uses should not involve any direct provision of customer services or goods.

As for sports and recreational uses, they are uses always permitted and no submission of applications for planning permission is required if such uses are located in the purpose-designed non-industrial portion on the lower floors of an industrial or I-O building and separated from the industrial uses located above by a buffer floor, such as that for car-parking.

The Administration notice the concerns of the arts sector about the use of industrial or I-O buildings for particular types of art studios. We would consider and examine the feasibility of relaxing the uses of these buildings to accommodate art studios. One of the major considerations is that the art studios concerned must satisfy all the fire safety requirements imposed on the industrial or I-O buildings, including the requirement that such activities will not attract visiting members of the public; for example, if such activities would attract the on-site participation of the public. 

To address the demand of artists for work and creation space, apart from the initiative above, we have also launched the arts space scheme through the Hong Kong Arts Development Council to provide studios for renting by visual/media artists at a concessionary rent. In addition, the Government has been studying the feasibility of developing arts space at other locations.

(5) and (6) The objective of the revitalisation measures is to better utilise the precious land resources of Hong Kong through encouraging the redevelopment and wholesale conversion of existing industrial buildings. The measures have to take into account the needs of the economic development of Hong Kong as a whole, and also the aspiration of the owners and users of industrial buildings, which is market-driven. The Government does not target at or tilt towards any particular sector. 

As at end September 2014, the projects of approved applications under the revitalisation measures could provide about 1 074 000 square metres of converted or new floor space (excluding the floor space involving in the 24 applications which were subsequently withdrawn/terminated after approval). Among these, 66 applications have executed the lease modifications or special waivers (excluding the 7 cases terminated after the execution of special waivers) and can provide about 908 000 square metres of converted or new floor space.

When the revitalisation measures for industrial buildings were promulgated in 2009, the Government has already stated that they were time-limited initiatives and the application period would be from April 1,2010 to March 31, 2013. Following a mid-term review on the revitalisation measures completed in 2011, the deadline of application was extended for three years to March 31, 2016. In October 2013, the Government refined the revitalisation measures for industrial buildings in order to further facilitate the applications for wholesale conversion of industrial buildings but the application deadline remained unchanged as at March 31, 2016. The Government will continue to keep in view the implementation of the measures but we have no plan to further refine the initiatives.
Ends/Wednesday, October 22, 2014
Issued at HKT 15:01

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