Kerry Properties will delay development of two million square feet of industrial-office space in Kowloon Bay until the Government's development plans for southeast Kowloon are known. 'We are waiting for the Government to come out with a plan,' said Chew Fook Aun, chief financial officer of Kerry Properties. The company is re-examining plans for two industrial-office sites. 'We are looking at all the opportunities,' Mr Chew said. 'We are going to hold the land for future development.' The two sites were bought by Kerry Properties through government tenders last year - one for $112.1 million and the other for $238.8 million. The company also paid $46.8 million for a smaller industrial-office site in Kowloon Bay in another tender last June. The Government is facing strong public pressure to scale down its proposed southeast Kowloon reclamation. The scale of the reclamation and the redevelopment blueprint for the Kai Tak airport site will have a far-reaching effect on neighbouring areas, including Kowloon Bay and Kwun Tong. The airport's relocation has already prompted some landlords in nearby To Kwa Wan to apply for a change of land use for their industrial buildings. Property agents said there was a glut of industrial-office space on the market, with about 2.5 million sq ft unoccupied. According to Government figures, the vacancy rate was 37.6 per cent at the end of last year. Mr Chew said one of the main reasons Kerry Properties bought the three sites was that they were cheap. It paid an average of $164 per sq ft for them. Kerry Properties has pressed ahead with plans to build a 27-storey industrial-office tower on the smaller site, adjacent to its commercial building Enterprise Square. The tower could provide gross floor area of about 245,000 sq ft. Mr Chew said the developer was taking advantage of synergies between the two premises. The new tower could cater for any of the existing client base in Enterprise Square who wanted more space. 'They are in Enterprise Square for commercial reasons but they could be in the new building for industrial reasons,' he said. Agents said Kerry Properties should have no trouble filling the new building. 'Many space users in the older stock in Kwun Tong would move to Kowloon Bay just because the environment is better,' said Victor Wong, commercial manager with Centaline Property Agency.
