Hong Kong government to boost cinema numbers through land lease terms

It will be mandatory for two commercial sites earmarked for sale in Kai Tak and Sha Tin to include cinemas in their land leases, as the government attempts to shore up the creative industries amid soaring rents.

Rules set a fixed number of seats for cinemas, while also stating that future modifications can only be made after seven years, and must be vetted by the government.

Industry insiders welcomed the move, but a property advisor questioned if the market should be left to adjust on its own.

Three years in a row, Chief Executive Leung Chun-ying has promised in his annual policy address to back creative industries by “facilitating cinema development through land sales and planning”.

The idea came to a head on Monday when two sites planned for sale in Kai Tak and Sha Tin will make the inclusion of cinemas mandatory.

“In identifying suitable land for the development, we believe that it will be more synergetic if we can find places where there are, for example, restaurants and cafes, together with shopping facilities,” Secretary for Commerce and Economic Development Greg So Kam-leung said.

The exact locations of the sites were not known, but So added that the two plots of land would be up for sale in a few years “if everything went smoothly”.

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Asked how many cinema seats the government planned to impose in the land lease clause, the minister said studies remained at a preliminary stage and the final proposal would depend on the prevailing business environment.

According to the Census and Statistics Department, revenue from cinemas doubled from HK$950 million in 2005 to HK$1.9 billion in 2015.

The government would also look into the feasibility of a cinema complex at the Tourism Node in the Kai Tak development – a 5.9-hectare hub for retail, hotel and office purposes – as well as the West Kowloon Cultural District.

Norman Chan Hok-yan, film director and lecturer at Baptist University’s academy of film, welcomed the move, saying cinema operations in Hong Kong have become increasingly difficult due to high rents.

“The high land price policy undertaken by the government in recent years contributed to the falling cinema numbers,” he said.

While there were now cinemas in 17 of Hong Kong’s 18 districts, Chan said most cinemas were smaller in size compared to the golden age of Hong Kong films in the 1970s and 1980s.

“Back then there were seven to eight cinemas in Mong Kok alone, each accommodating 500 to 600 guests. Now most cinemas can hold 200 to 300 people only,” Chan added.

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But Helen Mak, head of retail services at property adviser Knight Frank, questioned if such a rigid requirement should be imposed.

“Developers can always do the math and work out the best business model … the retail industry is always rapidly changing. Who knows what the market condition would be by the time these plots come up for sale?” she said.

Asked about the recent closure of a cinema in Tung Chung, Mak said: “If it was popular, I’m sure the mall’s operator would not drive it out.”

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