“Real Estate Disruption: Take A Step Ahead”
A Hong Kong Case: Energizing Kowloon East
Kowloon East comprises the Kai Tak Development, Kwun Tong and Kowloon Bay Business Areas. Shortage of office supply in Central motivated the development of Kowloon East. In the 2011-2012 Policy Address, the Government announced that it would seek for public private partnership to transfer Kowloon East into the second Core Business District (CBD) of Hong Kong to sustain Hong Kong’s economic development. Energizing Kowloon East office was formed in June 2012 to steer and facilitate the transformation.
What is so “disruptive” about Energizing Kowloon East?
- A visionary, coordinated and integrated approach with strong policy advocacy was adopted by Government to expedite the transformation of Kowloon East.
- A holistic, innovative and creative institutional framework that overcomes conventional division of responsiveness in Government.
- A willingness and capacity to facilitate private sector development in line with Energizing Kowloon East’s vision. Government has strong willingness to work with private sector and solve public problems.
- A mandate to deliver “quick wins” to instill confidence and involve the community to create. Quick-wins refers to enhancing connectivity and improving walking environment which make the city more attractive.
Office supply in CBD (including Central, Sheung Wan, Wan Chai, Causeway Bay, Tsim Sha Tsui and West Kowloon) rose from about 8.2 million to 8.6 million square meters (+4%) whereas Kowloon East stock rose from about 0.4 million to 1.8 million square meters (+340%) between 2000 to 2015. And the office space supply in Kowloon East between 2011-2015 has increased from 1.4 million to 1.8 million square meters (+29%). 75% of which was new development or redevelopment and 25% was conversion. By the end of 2021, the office stock in Kowloon East is estimated to reach 3 million square meters and it is potentially to provide additional commercial/office floor space of about 5 million square meters.
The conceptual master plan version 5.0 of Kowloon East included 4 elements: Connectivity, Branding, Design and Diversity. Three main categories are: Enhancing connectivity, Improving the environment and Unleashing development potential.
- Build up comprehensive pedestrian networks to ensure a walkable Kowloon East.
- Medium and long-term improvements including using Kowloon Bay and Kwun Tong Business Area as pilot area to encourage private developers to provide pedestrian links through waiving the land premium for lease modification.
- A Culture center will ground break next week; cycle track network will be built to enable people bike to work.
Improving the Environment:
- Greening and face-lifting Green Trail and Energizing Hoi Bun Road- Green Operation
- Face-lifting of Tsun Yip Street Playground, Tsui Ping River & Garden. Blend art pieces and industrial culture elements into the parks.
- Promote low-carbon and green building.
Unleashing Development Potential:
- 5 government land sale sites sold since 2012 provide about 270,000 square meter commercial floor area. By selling large land parcel together, government has more control over developers.
- 6 commercial sites in the land sale projecting in 2016-17.
Since development, there are some “unexpected” adding value to Energizing Kowloon East project.
- Place-making strategy leverage synergy of planning, design, community engagement, implementation and management in making improved venue into places for all. Over 175 community-organized events range from performance, exhibition, family fun days running and carnivals since 2013 and over 500,000 participants in those events.
- Tremendous local and overseas engagement occurred. Over 440 briefings, seminars, workshops, forums, conferences, exhibitions and visits organized since June 2012, over 12,500 participants attended and there were visitors and delegations from the Mainland and 24 counties.
- Kowloon East would be used as a pilot area to explore the feasibility of developing a smart city. The government created an innovation-oriented platform for converging people to interact and collaborate.
Mrs. Lam concluded her speech by quoting third party endorsement:
“We appreciate that it takes time to fully transform this area, and we take pride in being one of the first to set foot here.” – Weber Lo, Citi Country Officer & Chief Executive Officer, Hong Kong and Macao, November 2016
“Kowloon East will therefore become an increasingly important and viable location for large companies looking to secure large office spaces for their operations.” – HK Infrastructure Outlook – When East Meets West published by CBRE, July 2015
“Kowloon East is becoming an increasingly enticing office location for tenants as the real estate market continues to diversify, encouraged by the government’s policy on Energizing Kowloon East.” – Gavin Morgan, Chief Operating Officer & Head of Leasing JLL Hong Kong, May 2015
Keynote Address by Mrs. Carrie Lam Chief Secretary for Administration – The Government of the Hong Kong Special Admirative Region.