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Peggy Sito

Kerry Properties hopes to undertake a sizeable residential development in Kowloon Bay through an application to rezone its two industrial-office sites and several neighbouring government lots.

  The proposal marks a further effort by developers to have industrial sites or properties in the area rezoned for other purposes following the closure of Kai Tak airport.

 The fact that the Southeast Kowloon development planned for the former airport site and land to be reclaimed consists mainly of residential properties improves the prospects of redevelopment in nearby industrial districts.

 Kerry Properties executive director Steven Ho yesterday confirmed the company intended to rezone its two sites in Sheung Yee Road for residential use.

 'We are studying the possibilities of other investment potential in the sites, but it is at a very preliminary stage,' Mr Ho said.

 Kerry Properties is part of Robert Kuok's Kerry Group, which is the largest shareholder in South China Morning Post (Holdings).

 Sources said Kerry Properties' rezoning proposal covered about six hectares in Sheung Yee Road, Sheung Yuet Road, Wang Chiu Road and Wai Yip Street.

 It included a public site for open space and three lots zoned by the Government for industrial-office use. Some of the lots are now used as temporary parking space.

 Among them are a 59,000 square foot industrial-office site on the reserved list and available for sale through developer application. The development proposal also includes two industrial buildings owned by the Housing Authority.

 Sources said Kerry Properties could take the initiative in applying for the Government sites to be rezoned because, under the planning ordinance, any applicant had the right to seek rezoning of a site whether or not it owned it.

 If the collective rezoning application were approved, the developer planned to build more than 4,000 flats, providing a floor area of more than three million sq ft, sources said.

 But Mr Ho said the company did not have a final proposal and was yet to submit the rezoning application to the Town Planning Board.

 The proposal continues a trend by developers to seek a change of land use for their industrial sites in view of the decline in demand for space in the sector and the higher value of residential developments.

 Kerry Properties is a major landlord of industrial sites in Kowloon Bay. Earlier, the company reportedly joined forces with Wharf (Holdings) and Nan Fung Development to propose a collective rezoning of their sites in Kai Hing Road, covering an area of about three hectares.

 Kerry Properties bought the two industrial-office sites in its latest proposal through government tender last year - one for $112.1 million and the other for $238.8 million.

 In June last year, it paid $46.8 million for a smaller industrial-office site in Kowloon Bay in another tender.

 Chew Fook Aun, chief financial officer of Kerry Properties, previously had said the average value of the three sites was $164 per sq ft.

 Analysts said an increasing number of landlords of industrial sites in Kowloon Bay were applying to rezone their land for residential use.

 Henderson Land Development had submitted a proposal to convert an industrial block into serviced apartments, while Citic Pacific had sought to rezone its project for residential use.

 However, the Town Planning Board rejected both proposals.

 The Government so far had not approved any proposals to rezone Kowloon Bay as it believed the district was still a new industrial area and that there was no need to change, analysts said.



Kerry spearheads bid for Kowloon Bay homes