Heritage revitalization through adaptive reuse in Wanchai : an economic (cost-benefit) analysis

Abstract

In recent years, “Heritage Preservation” has become a hot topic, the public awareness to the heritage preservation and revitalization has been increasing, that the public not just in Hong Kong, but also in worldwide are aware of the preservation the heritage. It has been an understanding and agreement among the society that, the heritage represent values that not only in financial way, but also the historical and social values to the people which is “priceless” and hard to quantify by means of currency, it should be preserved for the identity of the people and for the benefit and enjoyment of future generation. The Hong Kong government has been actively engaged in heritage preservation and revitalization in recent years, but the result from it so as its achievement is yet to be concluded. On one hand the general public supports in heritage revitalization, but on the other hand, the feedbacks from the existing heritage revitalization projects says otherwise as the new usage of the heritage is somehow in doubt, as concerns have been raised in relation to its financial performance, and low or inactive usage of the site. The heritage and land are scarce resources, so as financial resource as well, if the heritage preservation project cannot achieve economic sustainability by means of having sufficient income to cover its expenses, then such resource will become a liability to the government and its people as such project will be rely on financial funding for its survival, which is against the intention of heritage preservation. In order to ensure that this does not happen, an active usage of the heritage preservation is key to its success that the building is successfully adapted to new usage that is fit for modern purpose and that usage is in need. Therefore, feasibility studies to the 2 heritage preservation projects: 7 Mallory Street and 60-66 Johnston Road have been carried out, with aim to find out the financial performance of these 2 projects, to understand the reason behind its success or failure on achieving self-sustain from an economic perspective. By adopting Highest and Best Use approach for the economic analysis, the financial performance of 7 Mallory Street was found to be not feasible as it fails in maintaining sufficient income to cover its own cost, while 60-66 Johnston Road was found to be successful in achieving self-sustain from economic perspective.