LI, Tao @ Hong Kong

The city’s real estate boom this year is giving a boost to industrial buildings as well with total sales reaching HK$23.4 billion as of December 18, data released by Midland IC&I Tuesday showed.

Over the same period, 6,811 registered sales of industrial buildings were recorded, only surpassed by sales of 7,512 sales in 2007.

“Driven by the government’s revitalization policies as well as its plans to convert seven industrial land banks into residential units, the sales of industrial buildings are likely to reach 7,065 totalling HK$24.4 billion by the year-end, exceeding the previous high of HK$22.5 billion in 2007,” said Stanley Chau, sales director at Midland IC&I.

In 2009, Chief Executive Donald Tsang said in his Policy Address that the government planned to release the economic potential of more than 1,000 industrial buildings by encouraging their redevelopment or conversion.

Tsang made the statement to promote what he identified as the city’s six pillar industries in which it held a clear advantage: education services, medical services, testing and certification services, environmental industries, innovation and technology, and cultural and creative industries.

The government promised to provide suitable land and premises to meet the city’s changing economic needs as many industrial buildings are either vacant or under-utilized.

In September 2010, Hong Kong’s Town Planning Board to that end gave the nod to convert nearly 30 hectares of industrial land into residential units, spreading over seven districts in the next several years. It expects the move to provide an additional 22,700 housing units.

Meanwhile, Pierre Wong, chief executive officer of Midland IC&I said the present cooling in Hong Kong’s private property market, is making the city’s industrial buildings a more attractive investment.

After the government imposed heavy stamp duties as part of its anti-speculative measures announced on November 19, Wong said that Midland had received a more-than-expected 120 inquiries on industrial buildings up to December 18.

Since the flipping of private homes collect punitive stamp duties, industrial buildings – which are immune from them – have caught the eye of investors, said Wong.

Low sales prices are another reason why industrial properties have become popular, as more than 80 percent of the transactions are priced below HK$5 million according to the property agency.

“Compared with the overheating real private housing market, Hong Kong’s industrial buildings are still sold at relatively low prices, which is not likely to draw the attention of the government in the near term,” Wong added.

Wong forecast that the transaction volume of industrial buildings in the first half of 2011 will increase by another 20 percent from the same period this year, while sales prices and rents will rise about 8 to 10 percent and 3 to 5 percent respectively.

China Daily

(HK Edition 12/22/2010 page2)

http://www.chinadaily.com.cn/hkedition/2010-12/22/content_11736415.htm