Large-scale second CBD project in Hong Kong is slowed down by delays

Alvin Ho bought into the dream of living in a vibrant neighbourhood surrounded by greenery, fronting Hong Kong's Victoria Harbour, when he put a down payment on a HK$9 million (US$1.1 million) one-bedroom apartment at the site of the former Kai Tak airport last year. The 36-year-old found his new home in the middle of a sizable construction site, without access to public transportation, in the three-block condominium project One Victoria, which was completed this month. For such a large site, planning is lacking. It's ridiculous," he said.

His land is located on a 3.9 km long strip that was formerly an airport runway. It is a portion of the 320-hectare Kai Tak Development, which is eight times larger than the West Kowloon Cultural District and one-fourth the size of the city's Central and Western district.

A bustling residential and commercial district with green spaces, as well as a sports and leisure hub that would appeal to both Hongkongers and tourists, were among the ambitious plans for the area that were drafted 15 years ago.

The project was supposed to start in 2013, but there were delays, which were made worse when the Covid-19 pandemic hit the economy and then social unrest in 2019. Since the 1990s, Kai Tak Development has also undergone numerous planning modifications.

The government declared in 2011 that it would be branded with the rest of East Kowloon as a premier second business district, Hong Kong's "CBD2," adding to its initial sports and tourism theme. In order to help with the city's severe housing shortage, a review in 2016 increased building density, allowing 49,900 homes for 134,000 people, a 28% increase. Additionally, the gross commercial floor area increased by 17% to 330,000 square metres (3.6 million sq ft).

With the subsequent rezoning of several commercial properties for housing, Kai Tak's most recent estimated population was 158,000.

Although the original vision was changed, the project is still far from being finished. The 2013-opened cruise terminal in Hong Kong at the end of the runway has been shut down due to strict Covid-19 regulations that have temporarily stopped cruise operations. This month, a sizable new Covid-19 isolation facility opened nearby, replacing the "tourism node" that was supposed to include lodging, dining options, and retail establishments. A mega sports park with a 50,000-seat main stadium at the opposite end of the runway was scheduled to open in 2019, but it won't be finished until at least 2024.

Three public housing projects and at least 12 private developments have already been finished, and residents have been residing there for some time. More than a dozen housing sites are still being built, and the government has yet to sell a number of additional plots. A premier office complex and 19-story "twin towers" with department stores, entertainment venues, and restaurants are among the three commercial developments that are almost finished. A few more business sites are still available. For technical and financial reasons, a monorail that would have connected the entire region was a key component of the public transportation system.

On the new Tuen Ma line, which connects the area to Hong Kong Island and the New Territories, the area is served by the MTR stations Kai Tak and Sung Wong Toi. Homebuyer Ho, however, claimed that the Kai Tak MTR station was more than 2 km away from his home and inaccessible due to construction, and that he had to drive or walk for 30 minutes to get to Kowloon Bay station. Estate agents told him he could move in before March of next year, but he wasn't sure since the transport wasn't prepared.

I invested in real estate here because I was optimistic about Hong Kong's future, said Ho, a financial professional. "I pictured Kai Tak as a destination that would serve as a hub for all of Hong Kong, a top tourist destination, and something of which we could be proud. But now I'm unsure of when it will occur. Former Institute of Architects president Vincent Ng Wing-shun claimed Kai Tak had significantly deviated from the original plans.

He said: "Because of its convenient location, Kai Tak has often been an expedient solution for the government whenever it needed land for ad hoc, urgent purposes," referring to the new isolation centre and the rezoning of commercial sites to build homes. However, where is the green CBD2 that sports fans and tourists once dreamed of? Today, it resembles a residential area more than anything else.

The "commercial vibe" is removed by rezoning

When analysts examine whether the Kai Tak Development has deviated too much from the original plan, three things stand out: the reduction of commercial sites, the holdup in building out its tourist-related facilities, and the removal of the monorail. Four commercial sites on the runway were converted to residential use over time, leaving only three. Several other places along Prince Edward Road East also underwent change. To make up for the loss, some government-use sites close to Kowloon Bay were rezoned for commercial use, but they were far from railway stations.

Market analysts claim that the changes lessen Kai Tak's appeal and its function in CBD2, but the government maintains that there will be enough additional commercial space in the entire region, including Kwun Tong and Kowloon Bay, to keep East Kowlon a core business district comparable to Central. This additional space will total 1 million square metres (10.8 million square feet) in the future, on top of the existing 2.9 million square feet (31.2 million square feet). According to Lau Chun-kong, managing director of the real estate firm Colliers Hong Kong, the land use was altered after some developers' bids for specific sites during the economic downturn fell short of the government's reserve price.

Although he did not believe the rezoning would have a significant impact on the availability of commercial space overall, he believed it diminished Kai Tak's sense of business. It is a setback for Kai Tak and Kowloon East's planned CBD2 development, the man claimed. In Kwun Tong and Kowloon Bay, Lau said, the availability of commercial space would depend on whether or not old industrial structures there could be converted into office buildings or redeveloped, though owners would have to take the initiative to get permission before those changes could happen.

Facility for Covid is "only temporary"

Questions about the fate of the "tourism node" planned for the 5.9-hectare area, which is close to the cruise terminal, were raised as soon as the large Covid-19 isolation facility rose at the runway site's terminus. There are numerous four-story buildings with 3,000 rooms and private bathrooms. The buildings have elevators, and some have views of the harbour or the lush Runway Park, which is currently off-limits to visitors.

Some pressure groups and district council members suggested that the blocks could be used as temporary housing for the poor because of their sturdy construction. However, the Development Bureau informed the Post that the isolation centre would only be there "temporarily," and a spokesman was unable to provide an estimated date of site release. Perry Yiu Pak-leung, a lawmaker for the tourism industry, expressed his hope that it would be returned as soon as the pandemic was over for the development of tourism, noting that cruise operators had asked the government to ease travel restrictions as they would like to resume "cruises to nowhere" later this year.

If the government values the growth of culture, sports, and tourism, it ought to do it well. Although it is acceptable to temporarily locate the isolation centre there, such valuable land resources should be used for their original purpose, the man said. The tourism node restoration should be done with foresight, according to Phyllis Li Chi-miu, a former deputy director of planning who retired in 2018. She warned that delaying too long could cause the area's market appeal to decline. If you look at successful ports around the world, it will be difficult for it to succeed in a mostly residential area, she claimed.

Before it was shut down due to the pandemic, the cruise terminal was underutilised due to poor transportation options and a dearth of amenities. The terminal was converted into a Covid-19 facility for treating elderly patients in April.

Discontent over the abandoned monorail

The government's decision to abandon the plan to build a monorail through the Kai Tak Development has likely caused the most discontent. The monorail was anticipated to connect Kai Tak with the rest of East Kowloon, linking a variety of leisure and watersport activities that would energise the business district, when then chief executive Donald Tsang Yam-kuen announced the plan in 2011. However, following two feasibility studies, transportation officials informed lawmakers last year that constructing the monorail would be very expensive and fraught with technical challenges. Instead, they suggested combining the use of bicycle paths, travelator networks, buses, and electric vehicles.

Many locals were in fact shocked by the news, according to Cheung King-fan, a district councillor for Kai Tak in Kowloon City. "They believed the monorail would actually exist when they purchased their homes. We fervently pray that the system can be repaired.

Nine developers established Kai Tak Runway Private Development Company in July as a non-profit organisation to work with the government on enhancing accessibility in the area as new projects on the runway are scheduled for presale soon or are due for delivery as early as next year. The government had already sold 11 residential plots on the runway for a combined HK$115.4 billion when it decided to abandon the monorail plan. Analysts predicted that the decision could result in a 15% reduction in new apartment prices. One of the nine developers, Ricky Wong, the managing director of Wheelock Properties, previously disclosed to The Post that the group was in discussions with authorities to permit bus services between various real estate projects and Kai Tak MTR station.

He acknowledged that the runway properties' "inconvenience" was the general perception that people had of them. Another member of the group, Henderson Land Development, stated that it remained hopeful of bringing up the monorail idea with the government. The Development Bureau, in a response to the Post, stated unequivocally that the plan would not be revisited and reiterated that both elevated and ground-level options had been investigated but were deemed prohibitively expensive, even for a shorter monorail line that only extended within Kai Tak.

Iris Tam Siu-ying, a planning consultant for the 2006 Kai Tak review, claimed that she was "forced to accept" the modifications and holdups despite the fact that planning needed to change to meet societal demands. She recalled the care taken to ensure that Kai Tak's urban design would be free of the large, blocky podium structures that are typical of the city's private residential developments. Instead, towers atop enormous podiums housed car parks, shops, and even gardens, leaving a street level devoid of people. Developers in Kai Tak were required to plan their structures so that wind could flow from the harborfront to the inner city. Additionally, there was plenty of room set aside for parks and public squares.

Tam advised against underestimating the population at Kai Tak despite her belief that the goal of establishing a CBD2 in East Kowloon would not be affected by the reduction of commercial sites. The actual total could be significantly higher than what planners had anticipated given the trend of developers building smaller flats. What are the effects of a growing population, she asked? Will the area experience a traffic jam? Will the quality of life be compromised? The government needs to consider each of these issues.

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