Government lays out ambitious HK$100b plan for Kowloon East
Updated: 2011-10-14 07:06
By Andrea Deng and Oswald Chen (HK Edition)
Hong Kong residents wait at an intersection in front of a commercial center in Kowloon East, Hong Kong. The ownership structures of many industrial buildings in the district will be the biggest challenge of the plan to turn it into a new CBD. Jerome Favre / Bloomberg
Area to be developed into another CBD
The government held a press conference on Thursday to elaborate on its ambitious plans to turn Kowloon East - including the site of the city's former Kai Tak Airport - into a core business district.
The government estimates the final bill for the project - which won't be entirely completed until 2023 - will cost more than HK$100 billion.
Secretary for Development Carrie Lam said up to 4 million square meters of land in Kai Tak, Kowloon Bay and Kwun Tong would be turned into commercial offices.
She added that plans were also in place for a HK$12 billion environmentally-friendly monorail to link the three places with the caveat that a public consultation would be held on that particular plan.
Lam said at the press conference that land for offices in Central, Wan Chai and Causeway Bay was very limited and a cumulative vacancy rate of just 4.8 percent. But with demand still growing, the government needs to look at alternatives.
Meanwhile, Chief Executive Donald Tsang said in Wednesday's policy address that the total Grade A office floor space in Kwun Tong and Kowloon Bay had grown 2.5 times to 1.4 million square meters and that the government planned to develop the district into a core business area.
However, the plans are not without their challenges. Lam said that the biggest could in fact be the complicated ownership structures of many of the district's industrial buildings.
A large number of properties in the district are privately owned, said Lam.
She added that some blocks may have up to 200 to 300 owners - so that means a herculean effort must be made in order to convince a majority of the owners to sell up before many of the existing buildings can be converted into commercial premises.
"We will let the market work as an impetus," said Lam. "Hopefully the prospect of Kowloon East will exert attraction to these owners and drive them to make decisions."
Lam added that the government plans to move 11 of its departments to Kai Tak by 2014.
She added the Development Bureau has also filed approvals for 16 old industrial buildings - 12 in Kwun Tong and four in Kowloon Bay - to be wholly converted or rebuilt. Another 19 applications are being processed.
The plans for the monorail will have 12 stations spanning 9 kilometers and will connect Kwun Tong with the former Kai Tak Airport. Additionally, it will also provide connections to the future Shatin to Central Link.
The governments also aims to build a promenade along the waterfront. Besides public space and an outdoor performance area, it also plans a convention center and space for a variety of commercial ventures.
The government's plans should give first-mover advantage to local developers who already have a presence in the district, said local property analysts.
These include names such as Kerry Properties, Henderson Land and Sun Hung Kai Properties, said Midland Surveyors Director Alvin Lam.
The government's plans could see a surge in rental prices in the Kowloon East region and lead to a fall in rents in traditional business districts such as Central, Causeway Bay and Island East due to market competition," said John Siu, an executive director at property consultancy firm Cushman and Wakefield (Hong Kong).
(HK Edition 10/14/2011 page2)