Kwai Chung industrial building to be converted into a 10-storey mall
Sun Hung Kai Properties to take advantage of HK revitalization scheme to turn 40-year-old industrial facility into 10-storey shopping outlet
The Hong Kong government's scheme to revitalise old industrial buildings has encouraged developer Sun Hung Kai Properties to invest in turning a 40-year-old industrial building into a shopping mall.
Fiona Chung Sau-lin, general manager of the leasing department at SHKP, said the company will begin work on converting the Luen Tai Industrial Building on Kwai Chung Road in Kwai Chung into a mall this month. The mall is expected to open for business in the middle of 2015.
The government's revitalisation plan, unveiled in 2009, aims to encourage owners of old industrial buildings to carry out redevelopments. Owners of the buildings are exempt from paying land premiums for converting the buildings to other uses.
"Our new mall will be the first conversion to a shopping mall under the revitalisation scheme," said Chung. "But it is not our first revitalisation of an old industrial district. We completed the development of the first phase of Millennium City in the old industrial area of Kwun Tong in 1998 and the shopping mall, apm, opened in 2005 together with an office tower, Millennium City 5. It took about seven years to transform the industrial area into a new commercial area."
Millennium City now offers 330 million sq ft of office space and 600,000 sq ft of retail space, making it the largest commercial development in East Kowloon.
In the Kwai Chung industrial district, Sun Hung Kai built Kowloon Commerce Centre (KCC), opposite the Luen Tai Industrial Building. The first office tower in the project was completed in 2008 and the second in August this year.
"The area is changing. The Open University of Hong Kong has opened a new campus [the Li Ka Shing Institute of Professional and Continuing Education] at KCC, and this will generate a lot of shopper traffic for our mall during weekends," Chung said.
"Kwai Hing is a populous area, but lacks a large shopping mall. We believe the new shopping mall will become a magnet that will attract shoppers from Kwai Hing, Kwai Fong and Tai Wo Hau."
SHKP will convert the industrial building into a 10-storey "Ginza-style" (vertical) mall with different shopping themes on each floor.
The 100,000 sq ft mall will feature a glass curtain wall and open terraces. New lifts and escalators will be installed.
A pedestrian bridge will link the mall to the Kwai Hing MTR Station and KCC.
The target market for stores in the mall would be shoppers from 25 to 49 years of age, and the tenant mix would include lifestyle goods retailers and food and beverage outlets, said Chung.
The developer will launch its leasing campaign this month.
"Rents of our shopping malls recorded a year-on-year growth of over 10 to 20 per cent this year. We didn't see a slowdown in rental growth as this was confined to street-level shops," said Chung, who manages nine major shopping malls across the city.
"We hope to maintain similar rental growth in 2014."