Hong Kong’s rising number of aged buildings need facelifts
The city has about 30,000 buildings aged 50 or above and the number is set to multiply in the next three years
Hong Kong’s buildings are ageing rapidly.
There are approximately 30,000 buildings aged 50 years or above, and the number is set to multiply in the next three years. These buildings are not only eyesores, but they’re also potentially hazardous.
Just last month, an aged building in Hung Hom collapsed, with concrete debris falling to the ground and a bed dangling in mid-air.
Since 2012, ageing buildings have been required to undergo statutory inspections under the government’s Mandatory Building Inspection Scheme/Window Inspection Service (MBIS & MWIS). Aged buildings are now required to be inspected by registered inspector and repair works are prescribed to make sure that they meet minimum regulatory standards and fire safety ordinance 572.
The MBIS requires renovations on these older buildings because most of them, having been built decades ago, will not meet the mandatory minimum requirements upon first inspection. Instead of renovating to meet the bare minimum requirements, CBRE recommends landlords to take the opportunity to go all the way, giving the building a full facelift to increase the capital value of the property.
According to CBRE’s intelligence, carrying out full renovations of aged buildings on Hong Kong island will easily help double the rental income, depending on the property’s location and proximity to MTR stations. Owners of aged buildings in Sheung Wan, Sai Ying Pun or Kennedy Town will benefit most from investing more in a full renovation because the upside for their rental income is promising in light of the opening of the MTR’s Island line extension. The improved accessibility and the high concentration of high-income tenants in the neighbourhood make a full renovation worthwhile.
From the tenant’s point of view, a modern building is more comfortable to live in, justifying the higher rental price.