Paul Y Centre, where Paul Y Engineering (0577) has its offices, is set for a wholesale conversion to commercial use if a planning application gets approved.
In an application submitted late last month, the registered owners of Paul Y Centre as well as the adjacent Spectrum Tower applied to the Town Planning Board for permission to change the use of the two buildings.
Paul Y Centre, an industrial/office building according to its government lease, will be converted into dedicated commercial use while Spectrum Tower, also an industrial/office building, will be turned into a hotel with 360 rooms.
Both buildings are located in the “Other Specified Uses (Business)” zoning.
According to the planning statement, the proposed typical floor plan at Paul Y Centre for the 8th to 33rd floors shows the floor divided up into 14 office units.
The 7th floor would be turned into a refuge floor while the lower floors would be largely retained as a carpark which the proposed hotel can use as well.
Land Registry records show Paul Y Engineering has leased four whole floors and part of one floor in Paul Y Centre.
The company did not respond to enquiries from Construction Post regarding its opinion on the planning application and whether it would have to move offices to make way for the conversion works.
“The proposed wholesale conversion is in line with the government policy to optimize the use of industrial buildings and to transform Kowloon East into another core business district,” the planning statement said.
It added conversion of industrial buildings would involve less construction waste, pollutants and energy consumption when compared to complete redevelopment.
Paul Y Centre, completed in 1996, used to be owned by Paul Y Engineering’s parent company PYI Corporation (0498) until it was sold off in November 2005 to a joint venture consisting of Paul Y Engineering, Capital Strategic Investments (0497) and the now bankrupt investment bank Lehman Brothers for HK$780 million.
After holding it for about 17 months, the joint venture sold it on to another investor for HK$1.15 billion in 2007.
Previously, conversion of use would require a lease modification and payment of premium to the government.
“If the Paul Y Centre complies with Lands Department Practice Notes 1/2010 and 1/2010A and (the owners] are adapting a 100 percent owned existing building, they may qualify for a special premium free waiver for the lifetime of the building for the change of use once Town Planning Board approve,” a former senior Lands Department official said.
For the time being, Paul Y Engineering, which is currently proposing to change its name to Louis XIII, appears to have some security of tenure.
According to its five-year lease at a monthly rent of HK$845,240, which was renewed in 2010, it will not have to move until January 2016.