Easier rules spur rezoning

PUBLISHED : Wednesday, 24 July, 2002, 12:00am
UPDATED : Wednesday, 24 July, 2002, 12:00am

With more liberal rules on land-use changes, CB Richard Ellis expects to see developers converting their older industrial properties to residential or commercial sites.

The property consultant said industrial property sales continued to display strong momentum in the second quarter.

The extended decline in industrial property prices resulted in a handful of properties available at attractive prices, it said.

With the significant discount in transactions prices, an increasing number of investors and end-users entered the market and focused on properties in the lower price range.

The relaxation of government restrictions on conversion of industrial land for other uses had contributed to the relative buoyancy of the market, CB Richard Ellis said.

The Lands Department also announced in April that it would implement a set of standard rates for premium charges for land-uses changes of properties in business zones.

Taking advantage of the relaxed rules, some developers had already initiated plans to undertake site conversions to maximise site values and the trend would continue, the consultant said.

Four industrial buildings were sold during the second quarter, involving HK$276 million, it said.

Historically low prices, high yields and the redevelopment potential of properties situated within the business zone served as an important catalyst in this relatively active industrial sales market.

CB Richard Ellis said while opportunities in other investment markets might not be entirely compelling, investment in the industrial property sector might prove to be a good alternative.

The consultant's indices showed warehouse rents and prices in large industrial districts dipped 1.1 per cent and 3.5 per cent respectively in the second quarter. Overall rental and prices for factory properties fell by 4.5 per cent and 5.4 per cent respectively. Average rents and prices for industrial-office properties dropped by 3.8 per cent and 4.5 per cent respectively.

The accumulated fall in grade-B office rents had prompted a handful of existing industrial-office tenants to start re-assessing their leasing needs.