The industrial manufacturer Chiaphua Group has submitted an application to the Town Planning Board to rezone two industrial buildings in Siu Lek Yuen, Sha Tin, for residential use. The proposal involves redeveloping the Chiaphua Industries Building and Chiaphua Centre into two 35-story residential towers. According to Town Planning Board documents, the project would provide 928 residential flats with an average size of about 511 square feet each.
The project is expected to cover a combined site area of 82,500 square feet, with a gross floor area of approximately 495,200 square feet. This total includes about 20,600 square feet of retail space. Alex Leung, senior director at CHFT Advisory and Appraisal, estimated the total land premium for the application to be between HK$1.8 billion and HK$1.95 billion, which equates to about HK$3,630 to HK$3,940 per square foot based on the proposed gross floor area.
Analysts suggest the move is driven by a sharp decline in demand for industrial properties despite a cooling residential market. Alvin TP Lam, director at Midland Surveyors, stated that industrial property values in Hong Kong are facing significant downward pressure. He noted that in the Siu Lek Yuen industrial area, occupancy rates are low and prices are hovering around HK$3,000 (US$383) per square foot. In contrast, Lam said if the properties were redeveloped into residential projects, the price per square foot could reach HK$15,000 to HK$18,000.
Lam described the residential market as "inevitably more attractive than industrial use" and suggested that the landlord's initiative could set an excellent precedent for other industrial zones closer to the urban core. Leung from CHFT Advisory and Appraisal agreed that changing the land use would yield the best return for the applicant and predicted that other nearby industrial property owners might soon follow suit.
The effort to convert the area has been ongoing for 17 years. Local media reports from 2009 indicate the Planning Department first proposed rezoning about 7.5 hectares of land and seven industrial buildings in Siu Lek Yuen for residential use. However, that proposal was officially abandoned by 2015 because the KMB Sha Tin bus depot at the site had not been relocated. The area then shifted toward commercial revitalization.
By the end of 2021, the Planning Department proposed rezoning the area for residential use again. Lam noted that relocating factories is a complex process, stating that whether nearby landlords undertake redevelopment depends on whether their facilities still serve a practical purpose, citing the still-operational Swire Coca-Cola plant as an example.
