RICS Hong Kong Response
HONG KONG, April 1 /PRNewswire-Asia/ -- Two policy measures on industrial buildings optimisation are effective today on April 1:
(1) Redevelopment in non-industrial zones and
(2) Wholescale conversion in "industrial", "other specified uses (business)" and "commercial" zones
RICS welcome the policy initiatives by Development Bureau to facilitate the owners of old/derelict industrial buildings to make alteration and conversion or redevelopment so as to make the best re-use of their otherwise vacant properties. RICS members are most capable of provide professional advice and input to these building owners in maximising the benefits of the above policy initiatives.
In view of many old industrial buildings may not fully meet with the modern building and fire codes, RICS recommend the government to adopt a more flexible approach in vetting the alteration and conversion plans of these old industrial buildings, as long as the safety standard is not compromised.
Regarding the policy measures, Mr. David Tse, RICS International Governing Councillor says, "RICS Hong Kong is very pleased to see the various recommendations proposed in its research report named 'Strategic Review of Issues associated with Conversion for Adaptive Re-use of Industrial Buildings' back in late 2008 have largely been adopted by Government, with bolder measures, e.g. "nil" waiver fee for whole block conversion of existing industrial buildings for non-industrial uses in certain specified zones. With all these initiatives, I am sure there will be much more and better re-use of these would be otherwise vacant existing industrial buildings in HK."
Details of the new policy measures on industrial buildings optimisation are as follows:
(1) Redevelopment in non-industrial zones
(d) Lower 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 tackle fragmented ownership in flatted industrial buildings.
(e) Allow tailor-made lease modifications at "pay for what you build" premium (i.e. assess premium based on the optimal use and proposed Gross Floor Area of the redevelopment).
(f) Allow owners who modify the lease for redevelopment to opt for payment of 80% of the land premium by annual installments over five years at a fixed rate of interest (at 2% above the average best lending rate of the three note-issuing banks prevailing at the time), if the total premium exceeds $20 million.
Policy measures (1b) and (1c) will be valid for three years from 1 April 2010. Industrial buildings in all non-industrial zones are eligible but the new uses should comply with the planning intent of the respective sites. Redevelopment should also be completed within five years.
(2) Whole-scale conversion in "industrial", "other specified uses (business)" and "commercial" zones.
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 land leases of the buildings expire, whichever is earlier.
The following eligibility criteria will be applicable:
(a) Industrial buildings aged 15 years or above and situated in "Industrial", "Commercial" or
"OU(B)" zones;
(b) Joint application by ALL owners of the building;
(c) There should not be any increases in building height, building bulk or Gross Floor Area after the conversion;
(d) The building cannot revert back to industrial use during the waiver period;
(e) Full market premium is payable when the buildings are redeveloped in future.
The above special measures are valid for three years from 1 April 2010. The new uses should comply with the planning intent of the relevant zones. Conversion works have to be completed within three years after issue of the waivers.
About RICS & RICS Asia
RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 140,000 members globally and represents, regulates and promotes the work of property professionals throughout 122 countries.
The RICS Asia supports a network of over 11,000 individual professionals across the Asia Pacific region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members.
The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: http://www.ricsasia.org
