Great Long-term Investment Potential | Factory Space in Hong Kong

Hong Kong was, once upon a time, a hub that had it's own light industry making plastic flowers, wrist watches, garments and other consumer products. When China opened up in the late 70s all of this industry moved north and Hong Kong's factories shuttered one by one. By the 90s with virtually no industry left in Hong Kong many of these industrial properties were worth very little because there was such an oversupply and so little demand. The designation of these properties as factory/industrial space meant that you could not use them for residential or commercial purposes. To this day the designation of industrial space means that you cannot use more than 30% of the space as office.
There are still around 2000 industrial buildings that remain til this day. For a while many of these industrial buildings were untenanted and run down but in the last decade due to the high property prices in Hong Kong some of these industrial units have been converted into self store places with small cubicles that people can use for storing personal effects. Some businesses have also started to use them as offices and some individuals have even converted them into homes. Developers have started to convert some of these into offices and even hotels in certain areas like Wong Chuk Hang. Certain areas like Kwun Tong have been re-zoned entirely from industrial into a commercial zone by the government.

Generally industrial buildings are all situated within concentrated areas rather than scattered randomly amongst residential buildings. These concentrations of industrial buildings exist in the following districts

Hong Kong
Chai Wan, Siu Sai Wan, Shau Kei Wan - few only, Wong Chuk Hang, Ap Lei Chau, Aberdeen, Kennedy town - few only

Kowloon
San Po Kong, Kowloon Bay, Kwun Tong, Lai Chi Kok, Cheung Sha Wan -few only

New Territories
Tsuen Wan, Kwan Chung, Fanling, Sheung Shui, Yuen Long, Tuen Min, Tai Wai, Sha Tin, Tsing Yi

The advantage of buying industrial building units is that the cost can be attractive compared with residential units. And as Hong Kong's commercial and residential demands increase so will the demand for industrial buildings. Some areas such as Wong Chuk Hang have already witnessed a tenfold increase in prices in the last 12 years or so and the same jumps in the future seem unlikely.

There are still many very interesting opportunities if you look around. Even today (in 2019) you can still find industrial properties under HK$3,000 per square foot which is less than a car parking space in most cases. Industrial buildings are not being built anymore so each one that is knocked down means one less to choose from. This sector may hold very interesting long term potential as housing supply continues to shrink and demand grow.