Spillover effect of revitalising industrial building on office in Kwun Tong

Abstract

This study examines the spillover effects of revitalising industrial buildings (RIBs) on offices in Kwun Tong, focusing on the impacts of the Revitalisation of Industrial Buildings Scheme introduced in 2010 and its reactivation in 2018. Using a hedonic price model included 934 observations, the study aims to address a key question: How does the revitalisation of industrial buildings affect the value of nearby office properties? The model evaluated spatial, time-related and modal effects of RIBs. The results indicate that (1) RIB enhances office values with closer proximity; (2) value enhancement effect diminishes when the office is located outside the 200m boundary; (3) redevelopment projects appreciate nearby office prices by 6.5%, outperforming wholesale conversions, which drop office values by 6.0%; and (4) the heterogeneous impacts of revitalisation modes are proven by greater office value generated by office adaptions, which increase 1.27% with 1 meter closer, than hotel uses, which rise 0.03% with 1 meter nearer. The findings highlight the importance of area-based revitalisation and redevelopment incentives in RIB policy while underlying the unintended consequences. Therefore, this study advocates for more nuanced policy measures, such as tailored incentives and strategic zoning, to optimise underutilised industrial buildings and maximise the economic benefits of RIB, balancing its downsides simultaneously.