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Journal of Chinese
Architecture and Urbanism Industrial space renewal in Hong Kong and Shanghai

The Hong Kong SAR government announced to restart
the “Industrial Building Revitalization” plan in October
2018, in its Chief Executive’s 2018 Policy Address based on
the review of the effectiveness of the first round of policies,
known as “Industrial Building Revitalization Policy 2.0.”
The policy aims to stabilize the price of industrial buildings
and to improve market motivation for renewal. The second
round of measures relaxed the rate of increase in the floor
area ratio of industrial building redevelopment, allowing Figure 3. The withdrawal case of Cheung Hing Industrial Building
and the partly renewed case of Wing Hong industrial building.
the increase in the floor area ratio of non-residential Source: https://hk.on.cc/hk/news/
redevelopment land to 20%. Fee waiver of title deed
transfer is also allowed on retrofitting of buildings, if the
owner provides no less than 10% of the floor area for
government-designated purposes. The measure aims to
incentivize private capital to intervene in revitalization. For
spontaneous renovations by the society, flexible planning
and design regulations are allowed during the transitional
period. The second round has received positive feedback
from the market. Until January 3, 2020, only 1 year after
the policy was launched, the Town Planning Board had
received 37 reconstruction applications, 12 of which have
been approved and distributed in Kwun Tong (5 cases),
San Po Kong (2 cases), Tsuen Wan (2 cases), Kwai Chung
(2 cases), and Hung Hom (1 case) (Figure 1). Among them,
4 cases have applied for lease modification to the Lands
Department, and the activity is much higher than that
in the first round. Another distinct outcome of policy in
the second round is the dropping down of the price index
of industrial buildings compared with that of residential
buildings.
4. Industrial space renewal policy and
practices in Shanghai
Shanghai has been in a leading position in China’s
industrial development since the mid-19 century when
th
the city opened its ports. For the past 30 years, the city has
transited into a post-industrial society, with the ratio of
tertiary industry surpassing 60% in 2012. Alongside, this Figure 4. Distribution of industrial land in Shanghai (2011).
Source: Shanghai Urban Planning & Design Research Institute
transition was an increase in unused or vacant industrial
land against the backdrop of a shortage of quotas for Rights in the Reform of State-owned Enterprises” (Order
construction land. According to the data from Shanghai No. 8, State Land Administrative Bureau), allowing the
Municipal Planning and Natural Resources Bureau, until functional transition of the administrative allocation land
the end of 2013, there was 772 sqkm of industrial land, by compensation of land price without change of land
which accounted for 26% of urban construction land and use. Many SOEs thus could enter the real estate market by
is mostly characterized by low efficiency, low-end, and paying a small amount of money, making profits from real
extensive (Figure 4). estate development projects on administrative allocation
Indeed, policies made for the renewal of industrial land land. Such renewal of industrial land, however, primarily
can be traced back to 1998, when SOE reform led to the benefits the original property owners and developers and
crisis of unemployment. To support the survival of those results in the loss of state-owned assets and rent-seeking.
SOEs, the government has issued “Interim Provisions on After 2000, “Interim Provisions on Strengthening the
the Management of Administrative Allocation Land Use Planning and Management of Land Use Change in Central

Volume 5 Issue 2 (2023) 5 https://doi.org/10.36922/jcau.0431