PUBLISHED : Saturday, 14 November, 2015, 12:01am
UPDATED : Saturday, 14 November, 2015, 12:01am
Wong Chuk Hang in Southern district is one areA where rents for industrial space have soared under a government revitalisation scheme.Photo: Jonathan Wong
The curtain comes down in March next year on a government policy that has driven up rent levels in industrial buildings, a move likely to bring cheaper rents. But for artists and creatives desperate for affordable space to work in, the change is likely to bring little respite.
Many artists who took advantage of bargain rents in spaces vacated by the declining industrial sector found themselves priced out due to a policy introduced in 2009 that allows owners to redevelop or convert industrial sites without paying land premiums.
Many such buildings were converted for office space, retail, dining and service industry use.
The government recently announced it would cease taking applications under the scheme but according to art critic Anthony Leung Po-shan: "The damage has already been done."
Officials statistics showed vacancy rate for industrial buildings in areas allocated for industrial use fell from 8.4 per cent in 2009 to six per cent last year. Vacancy rates for industrial buildings in commercial areas fell even more sharply over that period, from 6.5 per cent to 3.5 per cent.
Secretary for Development Paul Chan Mo-po earlier said the falling vacancy rate showed the scheme had served its purpose and that it was time to hand pricing "back to the market".
But Leung said the scheme had forced many artists and others in the creative industries to move out of their studios.
Figures from the Rating and Valuation Department show that the rental index for units in private factory buildings almost doubled from 99.4 in 2007 to 177.1 in August this year. The price index almost trebled, from 216.3 in 2009 to 742.3 in August.
"The scheme was halted not because of artists' criticism or meeting creative industries' needs for production spaces. It is ending because there aren't enough applicants," Leung said.
She said the situation would not improve as redevelopment in areas such as Southern district on Hong Kong Island and Kowloon East had pushed up the rent.
With the MTR's South Island Line due to open next year and the government actively seeking to push Kowloon East as a new central business district, industrial buildings in those areas have inevitable been affected, Leung said. Besides, exorbitant rents in the city centre had pushed businesses previously based there, such as galleries and hip restaurants, to use industrial space, driving away producers.
Wayal Chiu Wai-hung, senior director for industrial services at Colliers International, said Kowloon East and Southern district had become the most expensive areas for industrial space due to redevelopment.
Chiu said a wider economic downturn and a likely increase in US interest rates were expected to contribute to a fall of five to 10 per cent in the price of industrial buildings. But he said rents were unlikely to fall to the level seen before the revitalisations scheme, and artists and creative workers were unlikely to be able to obtain affordable studio space like they once did.
"The revitalisation scheme only stops taking applications next March, but the revitalisation continues for those [whose owners] already submitted applications," Chiu said. "It will take two to three years to see the impact."
The Development Bureau said that as of the end of last month, the Lands Department had received a total of 175 applications under the scheme. Of those, 116 have been approved.
http://m.scmp.com/news/hong-kong/education-community/article/1878645/city-industry-revitalisation-scheme-means-hong
