Car parks within industrial buildings in Kwun Tong illegally converted into shops to generate six-fold rental yield

Picture credit : Apple Daily

Since 2010, Government has put in place policies to revitalise industrial buildings around Hong Kong. Many buildings as such have since been converted for redevelopment. The Government has also relaxed certain restrictions on wholesale conversion, including allowing owners to recover the amount of gross floor area loss due to alteration of building structure by making minor changes on the outside of the existing building frames under specific conditions.

Apple Daily investigation team recently uncovered many instances of illegal conversion in Kwun Tong industrial area. Some of the building owners have removed the outer walls of their buildings and erected wooden partitions within their ground floor car park space to convert into retail shops for rent. Retail unit as such is then offered to prospective tenants for around HKD$20,000 per month, six times more than the original rental yield generated from car park space.

Some quantity surveyors have highlighted the danger of such rampant conversions as they do not comply with Code of Practice for Fire Safety in Buildings.

Apple Daily reporters found at least 40 industrial buildings in Kwun Tong area which have been approved for wholesale conversion into Grade A office and commercial buildings. Some unscrupulous owners decided to exploit the lucrative potential of this area by converting their ground floor car parks illegally into shops and short term warehouses.

The most blatant conversion can be found at Yip Fat Factory Building Phase Two, Hoi Yuen Road where the outer wall has been removed to make way for a 400sqf fashion store. The space currently occupies 2.5 parking lots originally designated for loading area.

Google image shows the original wall of Yip Fat Factory Building Phase Two, Hoi Yuen Road. Picture credit : Google image.
The outer wall is now removed and converted into a fashion store. Picture credit : Apple Daily
The remaining vehicle space for loading has been converted into 3 private vehicle car parks. Picture credit : Apple Daily
Mr.Chan, a quantity surveyor expressed that the conversion was done illegally without approval from the relevant authority. Picture credit : Apple Daily

Another similar conversion can be found at Yip Win Factory Building, 10 Tsun Yip Ln, Kwun Tong where a 160sqf shop has been erected and it is currently occupied by a florist paying a monthly HK$20,000 rent.

Florist occupying a 160sqf space at Yip Win Factory Building. Picture credit : Apple Daily

Wooden partition has been erected behind the florist at Yip Win Factory Building. Picture credit : Apple Daily

The ground floor car park at Yip Fat Factory Building is held under a holding company owned by renowned businessman, Mr. Yeung Kin-man who founded Biel Crystal Manufactory. In recent years, Yeung has aggressively acquired many office/carpark space in the area, amongst others, include Good Year Industrial Building, Legend Tower and Manning Industrial Building.

Land Department has since responded to Apple Daily reporters that all the 3 car parks involved were not approved for usage other than industrial purpose or warehousing. They would take appropriate action by sending a warning letter to the respective owners to rectify their illegal conversions.