Investors flock to Hong Kong’s industrial buildings. Even actress Rosamund Kwan is piling in

The value of industrial properties sold to mainland developers or investors totalled HK$2.32 billion (US$295.56 million) in 2018, reflecting a rise of 44.3 per cent from a year earlier

Investment flows are related to the scheme on Revitalisation of Industrial Buildings, which was relaunched in last year’s Policy Address

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AOffice 46, in Kwai Chung, represents the first investment by mainland developer China Aoyuan in Hong Kong. Photo: Handout

Published: 9:00am, 28 May 2019Updated: 7:48pm, 28 May 2019

Chinese developers are eyeing Hong Kong’s industrial property market, which has been traditionally dominated by local investors, as they gauge the value created by the conversion and redevelopment of aged structures in the world’s least affordable housing market.

The value of industrial properties sold to mainland developers or investors totalled HK$2.32 billion (US$295.56 million) in 2018, reflecting a rise of 44.3 per cent from a year earlier, excluding revitalised buildings which underwent complete conversion, according to data from CBRE.

Last year, mainland developers and investors bought HK$3.12 billion worth of revitalised industrial properties, reflecting their first investments in the sector, according to CBRE data.

“A lot of them have expressed interest in industrial properties,” said Tony Ng, senior director of capital markets at CBRE.

The scheme on Revitalisation of Industrial Buildings was put in place from 2010 to 2016 to encourage conversion and redevelopment of aged industrial buildings. The programme, relaunched in last year’s Policy Address, enables owners of industrial buildings aged 15 years or older to apply for conversion of use. The accepted conversions include transitional housing, offices, telecommunications exchange centres, data processing and support for the creative industries. Under the original programme, the government approved 124 applications for conversion and redevelopment “to meet Hong Kong’s changing social and economic needs”.

Among the scheme’s incentives, developers can benefit from an increase in floor area upon conversion.