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Wholesale Conversion

No: Question
Q1 What are the eligibility criteria for industrial buildings applying for waivers at a nil fee for change of use of the existing building?
Q2 If an industrial building is of multiple ownership, do I need the consent of all building owners to undergo wholesale conversion?
Q3 The requirement that a "special waiver" application has to be submitted by all existing owners of the industrial building is difficult to meet. Would the Government consider lowering this requirement?
Q4 Does the entire converted building have to be engaged in one single use?
Q5 Can industrial buildings be converted for hotel use?
Q6 Can industrial buildings be changed to hospital use?
Q7 Can industrial buildings be converted for residential uses?
Q8 Can industrial buildings be converted to student hostels?
Q9 Can industrial buildings be converted to columbaria?
Q10 Can industrial buildings be used for cultural and creative industries?
Q11 Is restaurant allowed within a former industrial building falling within an "Industrial" zone, and which has been converted entirely to non-industrial use(s)?
Q12 For a former industrial building falling within an "Industrial" zone, and which has been converted entirely to non-industrial use(s), which floors are regarded as "lower floors" of the converted building?
Q13 Are retail shop, karaoke lounge and rehearsal room for art performance allowed within a former industrial building falling within an "Industrial" zone, and which has been converted entirely to non-industrial use(s)?
Q14 Is 'Social Welfare Facility' allowed within a former industrial building falling within an "Other Specified Uses" annotated "Business" ("OU(B)") zone, and which has been converted entirely to non-industrial use(s)? Is 'Social Welfare Facility' allowed in an "Industrial" zone?
Q15 "Mini-storage" use is commonly found within existing industrial buildings. Will the revitalisation measures facilitate the provision of mini-storage within a former industrial building which has been converted entirely to non-industrial use(s)?
Q16 Would provisions of lift machine room, plant room, parapet wall, etc. on the main roof of a wholly converted industrial building be regarded as increase in building height?
Q17 Would the installation of curtain wall system in converted industrial buildings be regarded as increase in building bulk?
Q18 For wholesale conversion of an existing industrial building to a commercial building, if the original design of the building does not provide for access from one staircase to other staircases at each floor, can the roof be served as an interchange of staircases for the purpose of satisfying the requirements of the Means of Escape Code?
Q19 Provided that the total GFA of the converted building does not exceed the permitted GFA, can the building owner re-arrange the use of GFA to suit the new uses for the converted building?
Q20 Under the "Hong Kong Planning Standards and Guidelines", the requirement for car parking spaces in office and commercial buildings is higher than that for industrial buildings. It would be difficult for some existing industrial buildings to meet these requirements through wholesale conversion. Would the Government exercise flexibility in considering wholesale conversion applications?
Q21 Can a wholly converted industrial building carry out additional conversion works in future to suit new needs?
Q22 For industrial buildings not eligible for the wholesale conversion measure, can their owners still apply for change of use of the buildings without redeveloping them?
Q23 How much is the waiver fee for change of use of industrial buildings if it is not eligible for the nil waiver fee under the revitalisation measures?

No: Answer:
Q1  What are the eligibility criteria for industrial buildings applying for waivers at a nil fee for change of use of the existing building?
A1
  • The industrial building should be at least 15 years old (counting from the date of issue of Occupation Permit);
  • The building should be situated in "Industrial", "Commercial" or "Other Specified Uses" annotated "Business" ("OU(B)") zones;
  • The application should be jointly submitted by all owners of the building in order to achieve the objective of wholesale conversion;
  • All proposed uses in the building should be always permitted in the respective zone or planning permission for the proposed uses has been granted;
  • There should not be any increases in building height, building bulk; minor changes to the existing building frame, including variations to the internal and external structures, are allowed 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 should not be any increase in GFA after the conversion in excess of the specified maximum GFA as shown on its last approved building plan;
  • The building cannot revert to industrial use during the waiver period.
  • A valid application should be submitted between 1 April 2010 and 31 March 2016;
  • The proposed conversion works (if required) have to be completed within three years from the date of execution of the "special waiver".
   
Q2  If an industrial building is of multiple ownership, do I need the consent of all building owners to undergo wholesale conversion?
A2 To apply for wholesale conversion of industrial buildings at nil waiver fee, the application must be jointly submitted by all owners of the building.
   
Q3  The requirement that a "special waiver" application has to be submitted by all existing owners of the industrial building is difficult to meet. Would the Government consider lowering this requirement?
A3 A joint submission by all existing owners is necessary because one of the conditions for granting of the "special waiver" is that during the validity of the "special waiver", no part of the building may be used for any uses other than those specified in the "special waiver". This condition is required to address the potential fire safety concerns due to mixed uses (industrial and commercial uses) in the same building, and we cannot compromise on this important safety consideration.
   
Q4  Does the entire converted building have to be engaged in one single use?
A4 No. So long as the proposed new uses are always permitted in the respective zone or planning permission for the proposed new uses has been obtained, it is up to the owners to apply for such new uses in the converted building. If the "special waiver" is granted, the owners may use the building for the permitted uses specified in the waiver. However, incompatible uses (e.g. polluting industrial uses or storage of dangerous goods) will not be permitted.

For uses that are always permitted in various land use zones, reference should be made to the Notes attached to the relevant statutory town plan which covers the subject building (http://www.ozp.tpb.gov.hk/default.aspxThis link will open in a new window).
   
Q5  Can industrial buildings be converted for hotel use?
A5 The revitalisation measures aim to encourage wholesale conversion of industrial buildings in "Industrial", "Other Specified Uses" annotated "Business" ("OU(B)") or "Commercial" zones. The new uses of industrial buildings after wholesale conversion should comply with the permitted uses for the relevant zones.

From a planning perspective, hotel use is an always permitted use in most "Commercial" zones but will need planning permission if the building is situated in "OU(B)" zones. Hotel use is not permitted in "Industrial" zones.

If a building owner successfully obtains planning permission and meets the other eligibility criteria, the owner may apply to the Lands Department for the proposed hotel use in the building after wholesale conversion at a nil waiver fee. But it is important to note that the owners must also follow the relevant provisions of the Buildings Ordinance and satisfy other licensing requirements.
   
Q6  Can industrial buildings be changed to hospital use?
A6 The new uses of current sites of industrial buildings after their redevelopment or wholesale conversion should comply with the permitted uses for the relevant zones.

Hospital use is not permitted in "Industrial" and "Other Specified Uses" annotated "Business" ("OU(B)") zones. But private hospital operators may consider applying for planning permission from the Town Planning Board to redevelop existing industrial buildings situated in "Commercial" or "Residential (E)" zones for hospital use. These hospital redevelopments may also be eligible for the "pay for what you build" initiative under which the premium in respect of lease modification would be assessed according to the proposed development intensity of the hospitals.

Buildings for hospital use are usually specially designed to provide the necessary facilities, such as hospital wards and operation theatres. Hospital buildings also require specially-designed ventilation system and special facilities to handle medical waste and prevent the spread of infectious disease, so industrial buildings may not be suitable for conversion to hospital use.
   
Q7  Can industrial buildings be converted for residential uses?
A7 The revitalisation measures aim to encourage wholesale conversion of industrial buildings in "Industrial", "Other Specified Uses" annotated "Business" ("OU(B)") or "Commercial" zones. The new uses of industrial buildings after wholesale conversion should comply with the permitted uses for the relevant zones.

Only buildings located on sites which zoning permits residential uses can be used for residential purpose. Therefore, only industrial buildings located on sites which zoning permits residential uses can be considered for conversion to residential uses. Residential uses (i.e. flat, house and residential institution) are not permitted in "Industrial" and "OU(B)" zones. Residential uses are not always permitted uses in "Commercial" zones and planning permission from the Town Planning Board is required. A major factor that the Town Planning Board will consider is whether the proposed residential development is compatible with the operation of existing neighbouring industrial buildings. Other related factors, such as specific details of the proposed scheme, views of the local communities and the relevant government departments, will be fully considered during the approving process of the planning application.

Land use zoning aside, one should note that residential buildings are subject to more stringent requirements under the statutory building control regime in terms of, for example, plot ratio and site coverage. Therefore, whether it is technically and financially feasible to convert an industrial building on residential zoning for housing purpose has to be considered on a case by case basis. By way of illustration, in order to comply with the statutory requirements in terms of plot ratio and site coverage, parts of the industrial building might have to be demolished in converting it for residential uses, and that may render the conversion option unviable in terms of technical and financial considerations. Therefore, in some if not most cases, redevelopment would be a more viable option than conversion.
   
Q8  Can industrial buildings be converted to student hostels?
A8 The new uses of industrial buildings after wholesale conversion should comply with the permitted uses for the relevant zones.

Student hostels are regarded as a form of residential institution, and it is not a permitted use in "Industrial" or "Other Specified Uses" annotated "Business" ("OU(B)") zones. Residential institution is not an always permitted use in "Commercial" zone, and planning permission from the Town Planning Board will be required.

Furthermore, as industrial buildings are non-domestic buildings, it would usually require substantial alteration and addition (A&A) works to convert an existing industrial building into a domestic building suitable for use as student hostel.
   
Q9  Can industrial buildings be converted to columbaria?
A9 The proposed new uses of industrial buildings after wholesale conversion should comply with the permitted uses for the relevant zones.

Columbarium is not a permitted use in "Industrial", "Other Specified Uses" annotated "Business" ("OU(B)") or "Commercial" zones. Any waiver application will only be considered if the proposed uses are those permitted in the relevant town planning zones. Such applications will not be eligible for the measures designed to encourage wholesale conversion.

If owners of an industrial building in an "Industrial", "OU(B)" or "Commercial" zone wish to change the building for columbarium use, the owners must apply to the Town Planning Board for rezoning of the site into "Other Specified Uses" annotated "Columbarium". A statutory public consultation procedure will be conducted and the Board will consider the application accordingly.
   
Q10  Can industrial buildings be used for cultural and creative industries?
A10 Most of the industrial buildings in Hong Kong are situated in "Other Specified Uses" annotated "Business" ("OU(B)") and "Industrial" zones. From town planning perspective, various uses of cultural and creative industries (e.g. information technology, design and media production office, audio-visual recording studio, etc.) are allowed in these two zonings. But from fire safety's point of view, those non-industrial arts and cultural activities that may attract large number of visitors should not be conducted in industrial buildings that are still in active industrial uses. There is also a concern that such activities are not in compliance with the relevant land lease conditions which restrict the uses of the lots to industrial purposes.

To address the fire safety concern and the land lease consideration, owners of industrial buildings can apply to the Lands Department at a nil waiver fee under the revitalisation measures for changing the entire existing industrial buildings to provide suitable premises for various non-industrial uses, including uses for cultural and creative industries. The building owners are required to upgrade the building facilities to the prevailing statutory requirements and to undertake not to revert to industrial uses during the validity period of the waiver.
   
Q11  Is restaurant allowed within a former industrial building falling within an "Industrial" zone, and which has been converted entirely to non-industrial use(s)?
A11 Restaurant is regarded as 'Eating Place' according to the Definition of Terms used in statutory plans. According to the Master Schedule of Notes (MSN), within the "Industrial" zone, 'Eating Place' is always permitted if it is located in the purpose-designed non-industrial portion on the lower floors of an existing building provided that the restaurant is separated from the industrial uses located above by a buffer floor(s). If the entire industrial building is converted to non-industrial use(s), the floors accommodating the non-industrial use(s) may be regarded as buffer floors. As such, 'Eating Place' will be permitted as of right on the lower floors of the building which has been converted entirely to non-industrial use(s).

For the provision of restaurant on floors other than the lower floors within a building which is located in the "Industrial" zone and has been converted entirely to non-industrial use(s), previously it was a prerequisite to apply for zoning amendment under s.12A of the Town Planning Ordinance to amend the "Industrial" zone to other zone (e.g. "Other Specified Uses" annotated "Business" ("OU(B)") zone). But in order to increase the flexibility of the uses in wholly converted industrial buildings, the planning authority has already amended the MSN to include 'Eating Place', 'Institutional Use', 'Public Clinic' and 'Training Centre' in Column 2 of the user schedule of the "Industrial" zone. Up to March 2012, the Notes of seven Outline Zoning Plans (OZPs), including those of Kennedy Town and Mount Davis, Chai Wan, South West Kowloon, Fanling and Sheung Shui, Sha Tin, Ping Shan and Tsuen Wan, have been amended to incorporate the MSN amendments. Hence, provision of the abovementioned four uses, including restaurant, on the floors other than the lower floors in wholly converted industrial buildings in the "Industrial" zones of the seven OZPs would be allowed if planning permission under s.16 of the Town Planning Ordinance has been obtained, without the need to first apply for rezoning. The relevant authority will continue to incorporate the same amendments in the remaining OZPs.
   
Q12  For a former industrial building falling within an "Industrial" zone, and which has been converted entirely to non-industrial use(s), which floors are regarded as "lower floors" of the converted building?
A12 Upon receipt of the application, the Town Planning Board will examine thoroughly the details of each individual case to determine which floors are "lower floors". In general, floors lower than one-third of the building may be regarded as "lower floors". However, each application will have to be considered and scrutinised on a case-by-case basis.

(Remarks: the requirement and interpretation of Question 11 and Question 12 above are also applicable to 'Public Clinic', 'Institutional Use' and 'Training Centre'.)
   
Q13  Are retail shop, karaoke lounge and rehearsal room for art performance allowed within a former industrial building falling within an "Industrial" zone, and which has been converted entirely to non-industrial use(s)?
A13 According to the Definiton of Terms used in statutory plans, retail shop is regarded as 'Shop and Services', karaoke lounge is regarded as 'Place of Entertainment' and rehearsal room for art performance is regarded as 'Place of Recreation, Sports or Culture'. Similar to 'Eating Place' within "Industrial" zone, these uses are always permitted on the lower floors of an existing building provided that they are separated from the industrial uses located above by a buffer floor(s). For the provision of retail shop, karaoke lounge or rehearsal room for art performance on floors other than the lower floors of a building which has been converted entirely to non-industrial use(s), one has to submit planning application under s.16 of the Town Planning Ordinance to the Town Planning Board. This interpretation also applies to 'Office', 'Educational Institution', 'Private Club' and 'Religious Institution'.
   
Q14  Is 'Social Welfare Facility' allowed within a former industrial building falling within an "Other Specified Uses" annotated "Business" ("OU(B)") zone, and which has been converted entirely to non-industrial use(s)? Is 'Social Welfare Facility' allowed in an "Industrial" zone?
A14 According to the Master Schedule of Notes of "OU(B)" zone, 'Social Welfare facility (excluding those involving residential care)' is a Column 2 use. As such, for the provision of 'Social Welfare Facility (excluding those involving residential care)' within "OU(B)" zone, one has to submit planning application to the Town Planning Board under s.16 of the Town Planning Ordinance.

Within "Industrial" zone, planning permission under s.16 of the Town Planning Ordinance is required for the provision of 'Social Welfare Facility (excluding those involving residential care)' in the purpose-designed non-industrial portion on the lower floors of an existing building provided that such use is separated from the industrial use(s) located above by a buffer floor(s). Even if the entire building has been converted to non-industrial use(s), the provision of 'Social Welfare Facility (excluding those involving residential care)' is only allowed on the lower floors of the building upon obtaining planning permission from the Town Planning Board.
   
Q15  "Mini-storage" use is commonly found within existing industrial buildings. Will the revitalisation measures facilitate the provision of mini-storage within a former industrial building which has been converted entirely to non-industrial use(s)?
A15 According to the latest Definition of Terms agreed by the Town Planning Board, "mini-storage" use is categorised as a type of 'non-polluting industrial use'. As 'non-polluting industrial use' is always permitted within "Industrial" zone or "Other Specified Uses" annotated "Business" ("OU(B)") zone, there is no need to apply for planning permission from the Town Planning Board for "mini-storage" use if the entire building has been converted to non-industrial use(s).
   
Q16  Would provisions of lift machine room, plant room, parapet wall, etc. on the main roof of a wholly converted industrial building be regarded as increase in building height?
A16 Taking into account the relevant comments from the industry, the Government has affirmed that, for the purpose of applying under the revitalisation measures, placing GFA-exempted utility installations (e.g. machine room for lifts) on the main roof of a wholly converted industrial building not exceeding 50% of the roof area of the floor below would not be regarded as increase in building height. This provision is applicable to all eligible applications for wholesale conversion submitted on or after 1 April 2012. But the relevant installations will have to comply with the relevant building codes and standards, the lease conditions of the existing building and the Town Planning Ordinance, in particular the requirements under the approved plans, where applicable.

There are established rules and practices in determining building height under the Buildings Ordinance and its allied regulations, and the same rules will apply with regard to applications for wholesale conversion. Building owners should refer to the land leases and ascertain whether there are special conditions on building height restrictions. The "special waiver", if approved, will primarily waive the Government's right to enforce the user restriction in the lease conditions for the existing building. Should the owners wish to modify any other land lease conditions, they should submit a separate application for lease modification.

For those eligible applications for wholesale conversion submitted prior to 1 April 2012, the Lands Department will continue to exercise its discretion to consider allowing the placing of utility structures on the main roof during departmental circulation of building plans.
   
Q17  Would the installation of curtain wall system in converted industrial buildings be regarded as increase in building bulk?
A17 The installation of curtain wall system in itself would not be regarded as an increase in building bulk for the purpose of considering applications for wholesale conversion under the revitalisation measures. The Government has also affirmed that, for the purpose of applying under the revitalisation measures, installation of claddings or curtain walls on the external walls of a wholly converted industrial building would not be regarded as increase in building bulk. This provision is applicable to all eligible applications for wholesale conversion submitted on or after 1 April 2012. There are standing practices for consideration of curtain wall installations and owners should follow the same in their submission of building plans for wholesale conversion. They should also refer to the land leases to see whether there are restrictions in this regard.

For those eligible applications for wholesale conversion submitted prior to 1 April 2012, the Lands Department will continue to exercise its discretion to consider allowing the installation of claddings or curtain walls during departmental circulation of building plans.
   
Q18  For wholesale conversion of an existing industrial building to a commercial building, if the original design of the building does not provide for access from one staircase to other staircases at each floor, can the roof be served as an interchange of staircases for the purpose of satisfying the requirements of the Means of Escape Code?
A18 According to the Code of Practice for the Provision of Means of Escape in case of Fire (the Code of Practice), for buildings that are required to provide two or more exit staircases, people using one staircase should be able to gain access to at least one of the other staircases at any time without having to pass through other person's private premises. Such access should be provided either at each floor or, where refuge floors are provided, at the refuge floor(s) and the roof.

For industrial building not exceeding 25 storeys in height above the lowest ground storey and without the provision of refuge floor to be wholly converted to a commercial building, if the original design of the building does not allow people using one staircase to gain access at any time to other staircases at each floor, the main roof of the building has to be designated as a refuge floor providing access for interchange to the other staircases.

For industrial building over 25 storeys in height above the lowest ground storey and without the provision of refuge floor to be wholly converted to a commercial building, if the original design of the building does not allow people using one staircase to gain access at any time to other staircases at each floor, the building has to follow the requirements in the Code of Practice to provide refuge floor(s) and access for interchange to the other staircases at both the refuge floor(s) and the roof.
   
Q19  Provided that the total GFA of the converted building does not exceed the permitted GFA, can the building owner re-arrange the use of GFA to suit the new uses for the converted building?
A19 The GFA of the existing building after conversion should not exceed the GFA permitted under the building plans last approved for the existing building by the Building Authority before the application.

In a wholesale conversion case, minor changes to the existing building frame, including variations to the internal and external structures, are allowed. It is possible to relocate some of the existing plants and pipe ducts and re-arrange the use of GFA, so long as there is no increase in building height and building bulk, and the total GFA of the converted building does not exceed the permitted GFA. Any demolition of external structures should involve no more than 10% of the total GFA of the existing building.

Owners should also ascertain whether there are other restrictions in the land lease with regard to building height, number of storeys, GFA, etc.
   
Q20  Under the "Hong Kong Planning Standards and Guidelines", the requirement for car parking spaces in office and commercial buildings is higher than that for industrial buildings. It would be difficult for some existing industrial buildings to meet these requirements through wholesale conversion. Would the Government exercise flexibility in considering wholesale conversion applications?
A20 Futher to the discussions between the Development Bureau and the Transport Department (TD), TD has revisited the guideline on the provision of car parking spaces and loading/unloading facilities in industrial buildings applying for wholesale conversion based on its experience gained in processing applications received, so as to clarify its requirements for applications and considerations in exercising its discretion. For details, please refer to the page of "Provision of Car Parking Spaces and Loading/Unloading Facilities in Wholly Converted Industrial Buildings" of this website.
   
Q21  Can a wholly converted industrial building carry out additional conversion works in future to suit new needs?
A21 Yes, so long as the new uses are covered by the "special waiver" and the conversion works comply with the provisions of the Buildings Ordinance.
   
Q22  For industrial buildings not eligible for the wholesale conversion measure, can their owners still apply for change of use of the buildings without redeveloping them?
A22 Yes, but these applications should follow the established policy and procedures (as the following) and will not benefit from the revitalisation measures. The owners should first ascertain that the proposed new uses comply with the provision of the relevant statutory town plan, i.e. uses always permitted in the land use zone or use that have obtained planning permission from the Town Planning Board.

The owners may then apply to the Lands Department for a lease modification of the existing land lease to permit the new uses. The owner will be charged a land premium reflecting the increase in value of the building as a result of the lease modification (if approved).

Alternatively, owners may apply to the Lands Department for a temporary waiver, which allows temporary variations to the lease conditions by payment of a waiver fee. The waivers for change of use of industrial buildings are issued by Director of Lands in her capacity as a private landlord. The waiver fee in general reflects the enhancement in value of the premises as a result of such temporary waiver. The waiver fee may be payable periodically or in a lump sum upfront to cover the lifetime of the existing building or part of it depending on the circumstances of the case/the owners' intention.

The proposed change of use should comply with the provisions of the Buildings Ordinance. The applicant should submit buildings plans for approval by the Building Authority (BA) when the change of use involves alteration and addition (A&A) work. A written consent issued by the BA is necessary for commencement of work. If no A&A work is involved, the applicant should notify the BA the intended material change of use of the building. The BA will notify the applicant whether such change is acceptable.
   
Q23  How much is the waiver fee for change of use of industrial buildings if it is not eligible for the nil waiver fee under the revitalisation measures?
A23 Building owners who apply for wholesale conversion under the revitalisation measures will be charged a nil waiver fee, provided that the eligibility criteria are met and the application is approved. However, if owners wish to apply for change of use of individual units or if they cannot meet the eligibility criteria of the revitalisation measures, they will need to pay waiver fee if their applications are approved. The amount of the fee will be determined by the Lands Department.

Standard rates of waiver fee are applicable to certain uses in existing industrial buildings. For further information, please refer to the Lands Department Practice Note Issue No.1/2008 via the following link: http://www.landsd.gov.hk/en/images/doc/2008-1.pdfThis link will open in a new window.