OFC Builtup-Planning Considerations

8/14/2019 OFC Builtup-Planning Considerations

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Offshore Financial Center built-up:

Planning ConsiderationsGroup 8Interim Deliverable III Year 3 Surveying Studio 14 January 2010

HK as Asias Offshore Financial Center URL: http://hkofc.blogspot.com/


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PART I: A trend in 2030: The

need for mixed-use planningSeparate zoning isolating each type of development can easily lead to tra!c and environmentalproblems. Automobile and public transportation have become requirements for communication

between di"erent function strips, creating issues of automobile dependency, greenhouse gas

emission, energy over consumption, tra!c jam and so on.1

In 2030, environmental aspect has become the first issue to be concerned in any type of new

development due to serious air pollution and ever warming temperature. Hence mixed-usedevelopment is the best choice to alleviate those problems. Also, Hong Kong is free from hazardous

industries and mixed-use developments are most feasible in this city. The benefits of launching

mixed-use developments can be described by the following reasons:

Environment Protection

Arranging di"erent type of use together can e"ectively reduce a citys reliance on transportation. For

example, as an o"-shore finance center, there will be huge number of business people being

accommodated in hotels and commuting between hotels and o!ces every day. Hence a mixed-use

development can eliminate the need to use private or public transportation in this case.

By reducing the tra!c load, greenhouse gas emission can be controlled so that the new

development will not put pressure on the city warming problem. At the same time, mixed-use

development can reduce the demand for energy so that scarce resources could be saved. Last, due

to the lower requirement for transportation, huge expenses for road or railway maintenance could

be saved.

Attractiveness of the offshore finance center

As an o"shore finance center, Hong Kong must be able to attract companies to set up in this region.

One of the most crucial endeavors is to create a favorable environment for business people to work

and live within.

SUBJECT: PLANNING CONSIDERATIONS IN OFC! ! SURVEYING STUDIO III

PAGE 1 OF 17! ! GROUP 8

1 Mixed-use development : concept and realities : a research project carried out for the Royal Institution ofChartered Surveyors by the Department of Land Management and Development, University of Reading.(1996). London :: Royal Institution of Chartered Surveyors.P13


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A mixed-use development brings together the concepts of work, life and recreation, where people

can easily travel among accommodations, o!ces and shopping centers. This convenience can be a

selling point for such a business area, since time is extremely valuable for business people.

Designing everything in walking distance can reduce the time wasted in tra!c jams.

Moreover, by building channels between these premises, the occasions that people need to travel

outdoor could be abridged to the minimum. In this way, the impact of bad outdoor environment is

reduced. In the form of the channels could be overbridge or underground pass way where the

walking areas are enclosed with air-conditioning facilities.

City planning

With limited land supply, the government aims to get the best outcome of land developments.

Hence most of the urban areas have been defined as Comprehensive Development Areas (CDAs)

by the Town Planning Board. Any simple development plan is not likely to be approved by the

board.

In order to launch projects in CDAs, developers must submit innovative development plan so that

various functions of di"erent uses could be integrated to produce the best outcome in terms of

social, economical and environmental e!ciency. Economical e!ciency is best achieved by utilizing

di"erent areas of one location for various purposes. For example, the ground area is most valuable

for retail spaces. Social e!ciency could be realized by forming better communities in developments,

which will be discussed in the next section. Meanwhile mixed-use developments are beneficial to

environmental e!ciency because more flexible design can be implemented.2

Community

A mixed-use development is conducive to building up a colorful and creative community which can

change the public perceptions of growth and make it easier to obtain approvals from government.3

A multi-functional mixed-use development can facilitate the formation of a harmonious community

within the business region.

Mixed-use planning: two cases

As a matter of fact, mixed-use developments have always been the most favorable develop type in

existing o"shore finance centers.



2 Mixed-use development : practice and potential. (2002). London :: The Stationery Office. P117

3 Tom Kopf (2004). Building Community.P1 Retrieved from:http://store.builderbooks.com/cgi-bin/builderbooks/490?;;NAHB00
http://store.builderbooks.com/cgi-bin/builderbooks/490?;;NAHB00http://store.builderbooks.com/cgi-bin/builderbooks/490?;;NAHB00http://store.builderbooks.com/cgi-bin/builderbooks/490?;;NAHB00


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For example, Fairmont Hamilton Princess is a large hotel development in Bermuda. It o"ers 410

guest-rooms, approximately 19,000 square feet of indoor and outdoor meeting space, three food and

beverage outlets. More importantly, Fairmont Hamilton Princess is adjacent to Bermudas financial

and banking centre. Hence they together form a mixed-use business area in Bermuda which enjoys

great popularity.



Fig 1: Bermuda mixed-use area


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Similar developments can be found on Cayman Islands. For instance, a recent development, the

Blu", is a grand hotel with amenities including fine-dining restaurants, indoor and outdoor lounges,

flexible meeting spaces, special event and retail spaces.



Fig 2: Cayman Islands mixed-use area


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PART II: Hotel developmentIn order to lead Hong Kong in a way to be Asian o"shore financial center in future, within the

comprehensive and integrated project we planned, we suggest a crucial weight on hoteldevelopment. Traditionally, hotels, especially business type which includes service apartment within

and conference room, act as an annexation to o!ce building development. Their main function is to

accommodate the need for visiting businessmen and important business summit conference.

However, in the view of o"shore financial center, hotels and its related facilities will play a more

significant role than o!ce development as normally, o"shore financial center is also a perfect place

for tourism and this advantage will call for the need of a more relaxing spot for transaction to take

place.4

Slow down rather than speed up

In central district, there are only six hotels fulfilling the requirement of equal or above four-star.5 All

of them are standard business type or service apartment, which generally will easily let tourists

imagine the busy business trip from one region today to another tomorrow. It is the real life of

financial practitioners nowadays in main financial centers around the world. But it is not the way of

o"

shore financial center operation. As we have mentioned above, all current o"

shore financialcenters in the world are meanwhile impressive places for tourism, and the core conception for a

resort is recreational rather than sweatful. In order to grasp the concept of slow down rather than

speed up, it seems that the available hotels in core business district are not quite appropriate to be

adopted into the one in the concept of o"shore financial center, they are business oriented and could

suit the ordinary need. However, there is a need to develop intensive hotels, which could suit

various needs and functions, integrating both recreational and business requirements in future.

The hotels we need

We could obtain the inspiration of the type of hotel to develop from an overview of the hotels in

other major o"shore financial centers. We could learn the functions to be included in the hotel

development from successful ones and find out the reason behind these functions. A not quite



4 Rutes, W. A. (1998). Catching the wave : recommendations to create a more stable, sustainable hotel

industry in the long term. P15

5 Hotel.Hk . Hotel Information Center. Retrieved from:http://www.hotelhk.com/?hotelname=&district=002&grade=&price=0&sort=az&promo=0&eng=


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appropriate but quite demonstrative example is the Burj Al-Arab Hotel in Dubai, as the Fig 3

shows6:

Fig 3: Dubai

Dubai is a small o"shore financial center in the world, but the Burj Al-Arab hotel is a world famous

hotel in OFC. Although it costs hundreds of millions dollars and seems a little bit lavish, it could tell

a story about what we need in hotel development in the situation of o"

shore financial center wants.

First, it is easy to understand that we need high standard and luxury hotel in the comprehensive

development. Burj Al-Arab hotel itself is a seven-star hotel. Similar to that, hotels in other o"shore

financial centers, for example, Bermuda, are typically quite expensive.7 The rationale behind is that

people who invest or transact in o"shore financial center generally have high consumption powers,

thus will require a high service standard. Also, high service standard provided will match the status



6 Five Star Alliance. Dubai, United Arab Emirates. Retrieved from: http://www.fivestaralliance.com/luxury-

hotels/dubai/burj-al-arab

7 Wikitravel website. Bermuda travel guide. Retrieved from:http://wikitravel.org/en/Bermuda
http://wikitravel.org/en/Bermudahttp://wikitravel.org/en/Bermudahttp://wikitravel.org/en/Bermudahttp://www.fivestaralliance.com/luxury-hotels/dubai/burj-al-arabhttp://www.fivestaralliance.com/luxury-hotels/dubai/burj-al-arabhttp://www.fivestaralliance.com/luxury-hotels/dubai/burj-al-arabhttp://www.fivestaralliance.com/luxury-hotels/dubai/burj-al-arab


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of those noble gentlemen. Therefore, in order to accommodate the potential rich clients of those

o"shore funds, it is a need to develop a commensurate hotel to help promote the business of Hong

Kong as an o"shore financial center. Not only will the new luxury hotel have prosperous future,

high profit margin and low vacancy rate, but also it will influence positively to the business of the

whole financial region, just like Burj AI-Arab hotel did in Dubai.

Second, the new hotel should include complete facilities to integrate business and recreation. 8

Although scenery of Hong Kong is not as beautiful as that of coast and island regions, and the

pollution especially air pollution is quite severe, high temperature is di!cult to bear, it is an

opportunity to create internal artificial scenery which could avoid the local problem to some extent,

but also will attract more investors here, ultimately, it will add a new landmark and miracle to this world. Apart from that, we need more gentle facilities to cater the appetite to those rich people,

such as golf spot, fishing region, tennis, swimming pool, spa and etc. Those facilities will be

properly allocated in the whole hotel development. Moreover, the whole integration and

comprehensive project should be an enclosed eco-system creation development to make the whole

project a tourism spot in the Asian region.

Third, in consideration of the actual use of the hotel for business, we suggest a large conference

center to be included in the hotel development. Di"erent to the concept conference room in

traditional hotel development, the conference center will act as a medium for information

communication and sharing center within the whole region, or rather, the conference center o"ers

more than a place for meeting, it is a place to inspire ideas and a distributing center of information.

In future, the value of information will play more and more important role in financial world, a

specialized facility to provide the service of information will enhance the advantage of Hong Kong

in competition with other potential o"shore financial center in Asian region.


PAGE 7 OF 17! ! GROUP 88 Rutes, W. A. (1998). Catching the wave : recommendations to create a more stable, sustainable hotelindustry in the long term. P55


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PART III: Retail development Together with the increasing demand for o!ce and hotel suites in the Hong Kong o"shore

financial center, additional retail spaces are also essential to accommodate the development.

Referring to the situations of Bermuda and Labuan, the major economic income sources of OFC

nations are basically international businesses, i.e. o"shore finance and banking, and tourism.

However, we should note that the traditional form of tourism in OFCs like Bermuda is diminishing

as the economic core is shifted to the financial sectors, but not the income from average foreign

visitors. According to KPMG (2008)9, direct employment in tourism industry of Bermuda dropped

sharply together with the number of leisure-tourist visitors.

Therefore, promoting traditional tourists spots in Hong Kong in 2022 is not an attractive idea for

the future development plan. The mode of tourism industry has been changed since the

introduction of Individual Visit Scheme (IVS) in 2003. In 2008, the major source of tourists, which

concluded for 57% of the total tourists, is from the Mainland China.10

Market Regions 2008 Visitor Arrivals Growth over 2007

Mainland China 16,862,003 +8.9%

South & Southeast Asia 2,936,207 +1.7%North Asia 2,229,117 +1.3%

Australia, New Zealand and SouthPacific

763,206 +0.8%

Taiwan 2,240,481 +0.1%

Europe, Africa and the Middle East 2,094,039 -4.4%The Americas 1,684,734 -5.5%

Table 1: Hong Kong Total Visitors Arrival 2008

It is commonly observed that mainland tourists favorite activity in Hong Kong is shopping in large

malls and arcades. According to the research by the Tourism Commission, their consumption



9 KPMG (2008). KPMG's disclosures handbook 2005-2006: Accounting and Financial Reporting in theGlobal Airline Industry. P10

10 Hong Kong Tourism Board Research Statistics. Release of Final Arrival Figures for 2008.

Retrieved from: http://partnernet.hktourismboard.com/pnweb/jsp/doc/listDoc.jsp?doc_id=118558
http://partnernet.hktourismboard.com/pnweb/jsp/doc/listDoc.jsp?doc_id=118558http://partnernet.hktourismboard.com/pnweb/jsp/doc/listDoc.jsp?doc_id=118558http://partnernet.hktourismboard.com/pnweb/jsp/doc/listDoc.jsp?doc_id=118558


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power is huge. In 2008, the overnight visitor spending per capita is HK$5,43911, while over 50% of

those are contributed by visitors from the Mainland.

Business tourism is therefore a new possible direction for Hong Kong. Such kind of tourism

industry is highly appreciated by many developed countries, and more importantly international

financial centers. Business tourism stimulates potential investments by allowing business people

explore the attractions of Hong Kong while traveling on business trip or to attend a conference,

exhibition or incentive.12 Hence, business trip to Hong Kong provides a very good opportunity for

them to return to establish business operations here. Moreover, business travelers usually spend

about 3 times more than average tourists due to the high consumption power. In the UK, business

travelers brought over14 billion economic benefit to the nation.13 Direct and indirect employments

of business tourism account for over half million.

China is now the greatest economic body in the world. By 2020s, the major business partners and

investment sources of Hong Kong are also expected to be coming from China. The executive

classes doing business in Hong Kong would regularly visit the local core business districts (CBDs).

Ultimately, we need more o!ce space and conference facilities, which has been discussed in the first

and the second parts, and the core of business tourism: retail units. In the point of view of the high

consumption power of mainland visitors, especially the upper classes of the population, new o!ce

buildings should be developed with shopping complex underneath.

Such development design is not rare in the late 20th and 21st century . There are several o!ce-retail

complexes in Central like the Landmark and the IFC (mall). The tenants in the shopping malls are

usually high-class and well-known brands, such as Louis Vuitton and Gucci. These malls are

designed to target visitors with high consumption power, i.e. now the mainland business tourists.

The present situation implies that experience developers are available in Hong Kong. As a result,

carrying out this kind of development will not induce high transaction cost.



11 Tourism Commission, HKSAR. Tourism Statistics, Tourism Performance 2008. Retrieved from:http://www.tourism.gov.hk/english/statistics/statistics_perform.html

12 Guy, C. (1994). The retail development process : location, property, and planning. London :: Routledge.

P131

13 Business Visits & Events Partnership (2008). Making the Most of Our Business Visitors.Retrieved from: http://www.businesstourismpartnership.com/pubs/makingthemost.pdf
http://www.businesstourismpartnership.com/pubs/makingthemost.pdfhttp://www.businesstourismpartnership.com/pubs/makingthemost.pdfhttp://www.businesstourismpartnership.com/pubs/makingthemost.pdfhttp://www.tourism.gov.hk/english/statistics/statistics_perform.htmlhttp://www.tourism.gov.hk/english/statistics/statistics_perform.html


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PART IV: Industrial centers

Kwun Tong Data Center

Kwun Tong District is situated at the eastern part of the Kowloon Peninsula, and its boundary

stretches from Lion Rock in the north to Lei Yue Mun in the south, and from the winding paths of

Kowloon Peak in the east to the north coast of the former Kai Tak Airport runway in the west.

Background Information

Kwun Tong is one of the earliest developed urban areas in Hong Kong. Its population has been

growing rapidly, and the demand for housing, medical and educational facilities and services has

been increasing. In view of this, a number of community development projects, such as the

redevelopment of old housing estates and the construction of major parks, have been implemented

in recent years. These projects have incorporated a wide range of supporting facilities, like primary

and secondary schools, clinics, community centers and open spaces. All these facilities have brought

about a new face to the Kwun Tong District in recent years, making it a more comfortable place for

the people to live.

Industrial Development

The main industrial areas under the management of Kwun Tong District Council are located in

Kowloon Bay and Kwun Tong. In recent years, industrial restructuring and relocation of



Fig 4: former Kai Tak


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production lines and factories to the Mainland China have resulted in plenty of factory units being

left vacant. A lot of the vacant factory units have gradually been converted into o!ce premises. In

January 2001 and October 2001, the Town Planning Board (TPB) amended the related Outline

Zoning Plan to rezone the industrial land in the district to Other Specified Uses annotated

Business zone. This is to allow maximum flexibility in the use of existing industrial and industrial-o!ce (I-O) buildings as well as in the development of new buildings for both commercial and clean

industrial uses.

Regarding the planning applications for change of use to Commercial in Kowloon Bay Business

Area and Kwun Tong Business Area, 121 cases in Kowloon Bay Business Area and 304 cases in

Kwun Tong Business Area were approved by the TPB from 1990 to late June 2006.

PotentialAccording to our discussion, we think Kwun Tong has a potential to be a data-center in the future.

Based on the research about the history of Kwun Tong, we knew that Kwun Tong is one of the

industrial areas in Hong Kong. The factories had been built since the 1950s. The industrial area has

since then expanded to Kowloon Bay and Yau Tong. Since the importance of industrial production



Fig 6: Kowloon Bay Business Area Fig 5: Kwun Tong Business Area


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in Hong Kong is fading out, many factories were tore down and commercial buildings are being

constructed to replace them. But there still have many existing industry building which can easily

redevelop into data center buildings. Generally speaking, data center buildings always require much

space for air-conditioning and extra high floor height, which are the basic features of industry

buildings.

On the other hand, according to the Breaking New Ground Together, policy address 2009-10, no.

23, The community widely supports the development of the six industries, and has clearly reflected

to the Government that land resources are crucial to their development. Meanwhile, there have

been calls for realizing the potential of old industrial buildings. Due to the constraints of the existing

systems and policies, these valuable resources have not been fully utilized., it indicate the

governments standpoint that it broaden the uses of industry buildings so that it can make more

profit both to privacy and government itself.



Fig 7: Proposed Transformation


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Kwai Chung Media Center

Kwai Chung is an area in the New Territories of Hong Kong. Together with Tsing Yi Island, it is

part of the Kwai Tsing District of Hong Kong. Kwai Chung is the site of the container port. It is

also part of Tsuen Wan New Town. In 2000, it had a population of 287,000. Its area is 9.93 km

Background

Kwai Chung is the home of the principal commercial cargo handling area of Hong Kong, the Kwai

Chung Container Terminal, one of the largest and busiest port facilities in the world. 14 The main

commercial port was relocated here from Yau Ma Tei in the 1980's, in preparation for the WestKowloon Reclamation, which has left the original waterfront of Yau Ma Tei almost half a mile

inland.15

Kwai Chung is divided into three parts: upper, middle and lower. Upper and lower Kwai Chung

are mainly residential areas. These areas have a large concentration of public and private estates.

Factories are mainly situated in Middle Kwai Chung.



14 Hong Kong. Marine, D. (1966). The port of Hong Kong (1st- ed. ed.). Hong Kong :: Govt. Printer. P 21

15 Ho, P.-y. (2004). Challenges for an evolving city : 160 years of port and land development in Hong Kong(1st ed. ed.). Hong Kong :: Commercial Press. P42

Fig 8: Kwai Chung


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Potential

According to the newspaper in 2030, we know that the container terminal in Kwai Chung will be

closed up. On the other hand, due to the rapid development of import-export trade and large land

resources in mainland, we think container terminal in mainland will replace its status in the future.16

We have two proposal about the potential of redevelopment of Kwai Chung. One is the

entertainment and travel site, and the other is the media center.

We think the tourism is the main economic resource for Hong Kong not only nowadays, but also in

the future. We can rebuild Kwai Chung to be a new travel site in order to attract more visitors and

locals. Because of the historical value of the terminal, several warehouses can be made over into

museum in order to memorize its glorious history. On the other hand, due to the coastal location,

cruise terminal will be the best choice. It not only can solve the parking problem, but also it can

create a new travel route at sea. The development of hotels and vacation village can be considered as

well.


PAGE 14 OF 17! ! GROUP 816 Wan, L.-p. E. (1986). A study on the role of the government in the development of the Kwai ChungContainer Port. n.p. :: n. publ. P87

Fig 9: Residential Development in Kwai Chung


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Our second proposal about the media center is based on the special advantage of Hong Kong.

Hong Kongs lifestyle will remain unchanged for 50 years after 1997, so the freedom of speech will be

the absolute advantage in media field in Hong Kong rather than in Mainland. On the other hand,

the media industry in Hong Kong has a great deal of experience, the speed of spread news is

quickly, and the transparency of the information is high. So the development of media center in

Hong Kong will maintain this advantage and build up the specific feature of Hong Kong, it

provides a better stage to the media industry in order to improve the quality and the sensibility of

the information.



Fig 10: Proposed Develop


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ReferenceTom Kopf(2004). Building Community. Retrieved from:http://store.builderbooks.com/cgi-bin/builderbooks/490?;;NAHB00(Date: 10/12/2009)

Hotel.Hk . Hotel Information Center. Retrieved from:http://www.hotelhk.com/?hotelname=&district=002&grade=&price=0&sort=az&promo=0&eng=(Date: 10/12/2009)

Five Star Alliance. Dubai, United Arab Emirates. Retrieved from:http://www.fivestaralliance.com/luxury-hotels/dubai/burj-al-arab

(Date: 17/12/2009)

Wikitravel website. Bermuda travel guide. Retrieved from:http://wikitravel.org/en/Bermuda(Date: 13/12/2009)

KPMG (2008). KPMG's disclosures handbook 2005-2006: Accounting and Financial Reporting inthe Global Airline Industry.

Hong Kong Tourism Board Research Statistics. Release of Final Arrival Figures for 2008.Retrieved fromhttp://partnernet.hktourismboard.com/pnweb/jsp/doc/listDoc.jsp?doc_id=118558(Date: 19/12/2009)

Tourism Commission, HKSAR. Tourism Statistics, Tourism Performance 2008. Retrieved from:http://www.tourism.gov.hk/english/statistics/statistics_perform.html(Date: 27/12/2009)

Business Visits & Events Partnership (2008). Making the Most of Our Business Visitors.Retrieved from:http://www.businesstourismpartnership.com/pubs/makingthemost.pdf(Date: 23/12/2009)

Guy, C. (1994). The retail development process : location, property, and planning. London ::Routledge.

Ho, P.-y. (2004). Challenges for an evolving city : 160 years of port and land development in HongKong (1st ed. ed.). Hong Kong :: Commercial Press.

Hong Kong. Marine, D. (1966). The port of Hong Kong (1st- ed. ed.). Hong Kong :: Govt. Printer.


http://www.businesstourismpartnership.com/pubs/makingthemost.pdfhttp://partnernet.hktourismboard.com/pnweb/jsp/doc/listDoc.jsp?doc_id=118558http://wikitravel.org/en/Bermudahttp://www.businesstourismpartnership.com/pubs/makingthemost.pdfhttp://www.businesstourismpartnership.com/pubs/makingthemost.pdfhttp://www.tourism.gov.hk/english/statistics/statistics_perform.htmlhttp://www.tourism.gov.hk/english/statistics/statistics_perform.htmlhttp://partnernet.hktourismboard.com/pnweb/jsp/doc/listDoc.jsp?doc_id=118558http://partnernet.hktourismboard.com/pnweb/jsp/doc/listDoc.jsp?doc_id=118558http://wikitravel.org/en/Bermudahttp://wikitravel.org/en/Bermudahttp://www.fivestaralliance.com/luxury-hotels/dubai/burj-al-arabhttp://www.fivestaralliance.com/luxury-hotels/dubai/burj-al-arabhttp://store.builderbooks.com/cgi-bin/builderbooks/490?;;NAHB00http://store.builderbooks.com/cgi-bin/builderbooks/490?;;NAHB00


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Mixed-use development : concept and realities : a research project carried out for the RoyalInstitution of Chartered Surveyors by the Department of Land Management and Development,University of Reading. (1996). London :: Royal Institution of Chartered Surveyors.

Mixed-use development : practice and potential. (2002). London :: The Stationery O!ce.

Morgan, P. (1988). Retail development. London :: Estates Gazette.Planning mixed use development : issues and practice. (1998). London :: RICS.

Rutes, W. A. (1998). Catching the wave : recommendations to create a more stable, sustainablehotel industry in the long term

Hotel design : planning and development ([Rev. ed.] ed.). Hong Kong :New York ; London :: Jones Lang Wootton : JLW TransActW.W. Norton.

Wan, L.-p. E. (1986). A study on the role of the government in the development of the Kwai ChungContainer Port. n.p. :: n. publ.


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