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Kai Tak: The Last Oasis in an Urban Sprawl

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On 7 June 2012, the Hong Kong government set up the Energizing Kowloon East Oce (EKEO) to supervise and promote the development of Kowloon East; which would initially comprise of Kwun Tong, Ngau Tau Kok and Kowloon Bay, and later extended to include Kai Tak and San Po Kong to form the Central Business District 2 or CBD2 – Hong Kong’s second business district following the Central CBD.

Within six years, Kowloon East has evolved from an industrial cluster to Hong Kong’s second largest Grade A oce district, comprising of a total net door area of 14.1 million sq ft (1.3 million sq m), driven by the revitalisation of industrial buildings and new commercial land sales by the government.

The missing pieces of CBD2

Although the government continues to promote Kowloon East as the city’s CBD2, large and multinational companies still prefer retaining their main offices on the Hong Kong Island. Reflected by the district’s high vacancy rate, there has yet to be a solution to the geographic disadvantage and thelack of amenities; which for the past three years hovered at about 10% and is currently at 12%,significantly higher than Hong Kong’s overall vacancyrate of 4.7%. Furthermore, rental growth is likely to face further pressures from more than 4 million sq ft (371,600 sq m) of future office supply in Kwun Tong and Kowloon Bay over the next decade, which should widen the 67% rental gap between Kowloon East and Hong Kong Island.

So, what is missing from Kowloon East to become a viable and attractive CBD2? And what are some of the solutions?

The evolvement of the Kai Tak area, the industrial revitalisation of San Po Kong, and the upcoming completion of the Shatin-to-Central Link and Central Kowloon Route are likely the answers to the completion of Kowloon East as Hong Kong’s CBD2.

Kai Tak: Phase two of the CBD2’s development

Kai Tak, the former international airport adjoining Kowloon Bay, San Po Kong, and Kowloon City, is the last oasis in an urban area which covers a total site area of 34.4 million sq ft (3.2 million sq m), to be allocated for mixed-use development. Additionally, the Kai Tak harbourfront will potentially provide a gross floor area of 11.4 million sq ft (1.06 million sq m) of office space – about 15% of Hong Kong’s current Grade A office stock and capable of accommodating a working population of up to 90,000.

Commercial government land sale in Kai Tak

However, the commercial development of Kai Tak has been relatively slow compared to the 17 residential sites already sold in the area. Since the airport was relocated, the government has only sold two commercial sites, the site at Area 1F Site 2 awarded to Nan Fung as well as the site at Area 1E Site 2 sold to Lifestyle International. Both sites are set to provide over 2 million sq ft (186,000 sq m) of new office space. Commercial development in Kai Tak is set to accelerate in 2019/20, with the city’s office land supply focusing on five commercial/hotel sites comprising a total GFA of 5.5 million sq ft (513,900 sq m) scheduled to be sold. The completion of these sites within the coming decade and the strong supply coming from the Kai Tak area, should help Kowloon East surpass Central/Admiralty as Hong Kong’s largest Grade A office market.

Apart from the massive office supply, the area will be the new location for several government offices; given the redevelopment of the government office compounds in Wan Chai North for commercial and exhibition use, the Inland Revenue Tower will be relocated to Kai Tak north by mid-2022, adjoining the Trade and Industry Tower and the Community Hall which opened in 2015. The area will also feature 10.6 million sq ft (981,800 sq m) of open space, as well as the Kai Tak Sports Park.

Kai Tak Sports Park project site

A new focus on sport

The Kai Tak Sports Park, occupying 3 million sq ft (280,000 sq m) of land, will become the largest sports venue in Hong Kong upon completion. The complex will enjoy high accessibility through its connection with the upcoming Kai Tak MTR and Sung Wong Toi MTR Stations, as well as the harbourfront promenade. The Sports Park will be built with smart city initiatives including an intelligent building management system, wi-fi hot spots, an indoor positioning system, an intelligent car park management system, and mobile applications to facilitate precinct information, booking of facilities, and wayfinding.

In additional to sports facilities, the Kai Tak Sports Park will also feature large open spaces, a health and wellness centre, retail shops, and food and beverage outlets for public enjoyment. About 850 parking spaces, which include vertical greening and electric vehicle charging facilities, will also be provided. Construction commenced in Q1 2019 by the developer – New World Development, and is scheduled for completion in 2023. New World will be responsible for operating the facilities for 20 years. The objective of all the facilities and amenities provided by the Sports Park, aside from city-green and wellness initiatives, is to become the catalyst for the Kai Tak development.

San Po Kong: The CBD2’s new backyard

In October 2017, during the policy address speech, the government announced the inclusion of San Po Kong – an old district adjoining Kai Tak, into the CBD2 plan. Given the current large proportions of old industrial and residential buildings, the district has remained mostly overlooked. However, many of the buildings are reaching the end of their life cycles, allowing the district to soon regenerate and be reborn.

In February 2018, EKEO commissioned a feasibility study for the San Po Kong Business Area Pedestrian Environment and Traffic Improvement. The study will include the optimisation of Tai Yau Street – the main street in San Po Kong, and its connecting roads by improving the junctions, and enhancing the streetscape and the pedestrian links. The enhancements will incorporate Smart City concepts and integrate several new technologies, including smart traffic lights, illegal-parking monitoring systems, and personalised routes and real-time parking data via mobile applications.

San Po Kong business area and potential commercial supply All these initiatives have encouraged landlords and investors to redevelop or revitalise existing properties into new office buildings and hotels amid the relaunch of the industrial revitalisation scheme in 2019.

There are nine potential industrial buildings which are being planned for or have applied for revitalisation permits to become commercial buildings, which will comprise a total developable floor area of about 2 million sq ft (185,800 sq m).

San Po Kong’s location between the upcoming Kai Tak MTR station and the existing Diamond Hill station, as well as an elevated landscape walkway connecting the area directly to Kai Tak, should improve the accessibility in and out of the area. Additionally, San Po Kong can play a supporting role to Kowloon East by accommodating back offices and the expansions of multinational companies in the area, thanks to its increasing office stock and enhanced future accessibility.

Shatin-to-Central Link: The final piece of the puzzle

The geographical disadvantages of Kowloon East have remained unsolved, despite the Kwun Tong MTR line running along the area. Long travel time to the Central CBD, airport and other areas have presented themselves as a challenge to position Kowloon East as the CBD2 instead of a district – it currently takes about 28 minutes to travel from Kowloon Bay to Admiralty via the Kwun Tong Line and can take even longer with road transportation during peak hours.

The Shatin-to-Central Link which connects Tai Wai via Kai Tak and Hung Hom with Admiralty is likely to be a game changer. Travelling time from Kai Tak to Admiralty will be cut to 10-15 minutes with no transitions, similar to the connection between Admiralty and Island East. Meanwhile, road accessibility of Kai Tak will be echoed by the future completion of the Central Kowloon Route, a 4.7 km dual 3-lane trunk road with a 3.9 km underground tunnel connecting Kai Tak with West Kowloon, which is scheduled to be commissioned in 2025.

Kai Tak will be connected to Kowloon East via shuttle buses, as well as the upcoming elevated rail-based Environmentally Friendly Linkage System (EFLS), which is currently being studied by the government, and will pass through various locations within the CBD2. With all these developments and accessibility enhancements, the Kai Tak fantasy, or the CBD2 dream for Kowloon East should eventually come true, attracting large companies and banks underpinning their headquarters in the area.