Ease rules for factory conversions, says Far East Consortium

Property developer Far East Consortium International says the government should relax conditions on the conversion of industrial buildings for other uses in a bid to speed up the redevelopment of under-utilised properties.

Far East chairman David Chiu said owners should be allowed to make alterations to exterior walls of a building equivalent to 30 per cent of the property's total gross floor area, up from 10 per cent.

"This would allow for more windows in redevelopment projects and enhance their commercial value," Chiu said.

Far East's hotel arm, Kosmopolito Hotels International, is converting old or industrial buildings into three to four-star hotels to cater to mainland tourists. It has 4,873 rooms in 18 three-star and four-star hotels in Hong Kong, on mainland China, and in Malaysia.

Far East would expand its investment in developing "boutique-style" apartments in urban areas, said Chiu, since small developers faced strong competition from large-scale housing projects built by property giants.

The company's 1,124-unit Star Ruby boutique-style residential project in Hung Hom had proved successful, he said.

About 80 per cent of the units had been sold at an average of HK$10,000 per square foot. The units range from 400 to 600 sq ft.

In Malaysia, the serviced apartment project, jointly developed by KHI and Mayland Valiant, also attracted a strong response from buyers, with 1,989 units sold when it was launched for pre-sale in the first quarter of this year.

Chiu said he hoped the new administration in Hong Kong would consider releasing more smaller sites for development, from about 10,000 to 20,000 square feet, in the New Territories or in urban areas.

With a plot ratio of about five times, such sites could be sold for less than HK$1 billion, which would make them affordable to small to medium-sized developers.

Chiu said he supported the government's 10-point plan to increase supply as a way to stabilise prices. "Home prices will gradually come down when new supply starts to roll in," he said.

Chief Executive Leung Chun-ying last month announced a 10-point plan to increase supply. The measures include the sale early next year of 830 home ownership scheme flats in Tin Shui Wai that were put on hold because of a short-piling problem in 2000; selling 1,000 flats in Tsing Yi under the My Home Purchase Plan to families earning less than HK$40,000 a month and converting the Chai Wan factory estate into public housing to create 180 units.