Due to the long term decline in manufacturing activities and increasing demands from alternative uses such as office, hotel and residential, nearly all industrial land in Kowloon was rezoned for non-industrial uses several years ago.
Following the rezoning, over 1,000 industrial buildings became eligible for change of use. However, between 2001 and 2009 there were only 37 cases of lease modification for change of use (34 for re-development and three for wholesale conversion). In 2010, therefore, the government introduced a range of measures to facilitate redevelopment or wholesale conversion of older industrial buildings into alternative uses, in order to promote higher value economic activities. Kowloon East is a particular focus, with the government encouraging development of a new business district, called “CBD2”.
Taking advantage of the wholesale conversion scheme, a fund managed by Pamfleet acquired an industrial building at 164 Wai Yip Street in Kwun Tong with the intention of re-positioning it as a quality office property. The building, which will be re-branded as “The Mark”, has a gross floor area of approximately 6,470 square meters, and the typical unit sizes will range from 1,630 square feet (half floor) to 3,500 square feet (full-floor). SME tenants such as professional and consultancy firms related to tourism, engineering and infrastructure development, are expected to form the target audience.
According to the Trade and Industry Department, there are about 320,000 SMEs in Hong Kong, accounting for over 98% of all businesses. Kowloon East has been a major absorber of leasing activity in recent years, as new supply has been filled by growing and expanding businesses hungry for space in more affordable decentralized districts.The current vacancy rate of office space in Kwun Tong remains below 5%.
The original industrial building was built in 1995 and consisted of21-storeys with car parking on the ground, first and second floors. Pamfleet’s refurbishment programme includes replacing all existing windows, installing new building services with individually controlled A/C units, upgrading lift systems, re-configuring the car park, providing new washrooms, redecorating common areas and creating a Grade-A entrance. In addition, a dedicated floor of meeting rooms and other tenant-only facilities will be provided.
Pamfleet has applied for BEAM Plus certification for The Mark, which will foster a quality and sustainable design. This certification is taken into consideration by the Buildings Department when granting exemptions on artificial lighting and mechanical ventilation due to structural constraints in providing the required natural lighting and ventilation in compliance with the latest office code. The renovation is underway and will be completed by December 2014.
Pamfleet is a real estate investment manager, specialising in acquiring underperforming properties and repositioning them to add value. The company focuses on renovation and rebranding of commercial buildings and has built a successful track record since its formation in 2000. Completed projects include Vicwood Plaza, Kowloon City Plaza, 68 Yee Wo Street, Nexxus Building and Ovest. From its offices in Hong Kong and Singapore, Pamfleet’s team is very hands-on in managing its property assets, with particular emphasis on project management and marketing.