LCQ3: Revitalisation of industrial buildings
Following is a question by the Dr Hon Joseph Lee and a reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (December 12):
Earlier on, the Government announced a package of short to medium term housing and land supply measures to alleviate the problem of housing shortage, including changing the use of the sites or the premises of industrial buildings. For example, the renewal of old industrial areas will be accelerated to release more sites suitable for residential development and suitable industrial buildings will be converted into public rental housing (PRH) or "transitional accommodation", so as to increase housing supply. In this connection, will the Government inform this Council:
(a) whether it has assessed the current number of vacant industrial buildings in Hong Kong, the number of such buildings which are located on sites suitable for rezoning to residential use, and the number of those suitable for conversion into PRH as well as the reasons for the sites of certain industrial buildings being unsuitable for rezoning to residential use; of the authorities' measures to facilitate changing the use of such industrial buildings and expedite their revitalisation and, alternatively, what other means the authorities will adopt to minimise vacancy of industrial buildings as far as possible;
(b) whether it has assessed the differences in terms of the time and resources required between redeveloping industrial buildings into PRH and constructing PRH on newly-formed land; if it has, of the details; if not, whether it will do so expeditiously; and
(c) as the authorities have said that they are exploring ways, under the policy on revitalisation of industrial buildings, to facilitate wholesale conversion of industrial buildings to "transitional accommodation" use on an interim basis, whether they have assessed the number of industrial buildings whose owners will make such applications and the number of transitional accommodation units that can be provided; of the criteria for vetting and approving such applications; and whether they have formulated measures to monitor if the converted industrial buildings meet the safety standards?
The Chief Executive announced on August 30, 2012 ten short to medium term housing and land supply measures, of which two were related to industrial land, including (1) to convert the Chai Wan Factory Estate for public rental housing (PRH) use by the Housing Authority (HA) and to launch two redevelopment projects of industrial buildings by the Urban Renewal Authority for residential and office uses respectively; and (2) to explore the feasibility of allowing conversion of industrial buildings where appropriate for residential use under the town planning regime and the Buildings Ordinance. These two measures fall under the purviews of Transport and Housing Bureau and Development Bureau, and we are committed to taking forward the relevant work.
My reply to the three parts of the question is as follows:
(a) The Area Assessments of Industrial Land in the Territory (Area Assessments), completed by the Planning Department in 2009, proposed to rezone about 60 hectares of industrial sites in various districts for non-industrial uses, among which a total of 16 sites (five are government sites) comprising about 30 hectares of land were proposed to be rezoned for residential use. The relevant authority is under the process of amending the Outline Zoning Plans concerned for implementing the said rezoning proposals. The Area Assessments, which also investigated the uses of industrial buildings located within "Industrial" and "Business" zones, found that the overall vacancy rates of these two zones in terms of floor area were about 6.5% and 8.4% respectively. When rezoning an industrial site for residential use, we have to take into account a series of factors, including whether the vacancy rate of the site is at a high level; whether the site is under single ownership; whether the industrial building(s) on the site has/have relatively high building age; whether the site is already built or committed for non-industrial uses; whether there are still active industrial activities in the industrial building(s) on the site; whether rezoning the site for residential use would give rise to industrial/residential interface problems in the aspects of environment and transport.
To encourage the provision of suitable premises through redevelopment or wholesale conversion of vacant or under-utilised industrial buildings to meet the current social and economic needs of Hong Kong, with a view to better utilising the precious land resources, the Government has implemented the following measures for revitalisation of industrial buildings (the revitalisation measures) since April 2010:-
(1) To encourage redevelopment
(a) Lowering the application threshold for compulsory sale orders under the Land (Compulsory Sale for Redevelopment) Ordinance from 90% to 80% of ownership for industrial buildings aged 30 years or above situated in non-industrial zones to address fragmented ownership in flatted industrial buildings.
(b) Allowing tailor-made lease modifications at "pay for what you build" premium.
(c) Allowing owners who modify the lease for redevelopment to opt for payment of 80% of the land premium by annual instalments over five years at a fixed interest rate, if the total premium exceeds $20 million.
(2) To encourage wholesale conversion
(a) Owners may apply at a nil waiver fee for change of use of existing industrial buildings for the lifetime of the buildings or the current lease period, whichever is earlier. The following eligibility criteria have to be met:-
(i) industrial buildings aged 15 years or above and situated in "Industrial", "Commercial" or "Business" zones;
(ii) joint application by all owners of the building;
(iii) there should not be any increases in building height, building bulk or total gross floor area (GFA) after the conversion;
(iv) the buildings cannot be reverted to industrial use during the waiver period; and
(v) full market premium is payable when the buildings are redeveloped in future.
(b) Placing GFA-exempted utility installations (e.g. machine room for lifts) on the main roof not exceeding 50% of the roof area of the floor below would not be regarded as increase in building height, while installation of claddings or curtain walls on the external walls would not be regarded as increase in building bulk.
(c) Allowing minor changes to the existing building frame, including variations to the internal and external structures, on the conditions that demolition of external structures should involve no more than 10% of the total GFA of the existing building and that there is no net increase in the total GFA after conversion.
The deadline for submission of applications under the above revitalisation measures is March 31, 2016.
(b) Government sites rezoned for residential use will be allocated for public or private housing development in accordance with their surrounding areas (e.g. whether they are located near MTR or other major public transport facilities, their suitable development intensity, etc). According to the Transport and Housing Bureau, the time and resources required for each individual PRH project vary and the HA does not have information on the relevant assessments of redeveloping industrial buildings into PRH and constructing PRH on newly-formed land. Generally speaking, having regard to the land characteristics, infrastructure facilities, planning requirements and local objections of individual PRH development projects, the HA will have to carry out various technical studies, provide the required infrastructure facilities, obtain the necessary planning permissions where appropriate, and maintain close communication with the relevant government departments, district councils and local communities.
(c) In converting industrial buildings for residential use, the Town Planning Ordinance and statutory plans, the Buildings Ordinance and its subsidiary legislation (including those safety-related standards), and the conditions in the relevant land leases have to be complied with. Currently, the Government is studying possible ways in the context of the policy on revitalisation of industrial buildings to facilitate wholesale conversion of suitable industrial buildings to "transitional accommodation" use on an interim basis as a stop-gap measure. The relevant study is still in progress. Whether private industrial buildings will be converted for such use will depend completely on the intention and circumstances of individual owners, such as their ownership status and return considerations, etc. We are not in a position to assess in this stage the possible market response to the relevant measure upon its introduction. Once the measure is introduced, the authorities concerned will ensure the compliance of relevant safety standards in the converted industrial buildings.
Ends/Wednesday, December 12, 2012
Issued at HKT 14:40