Link will invigorate old towns, say agents
Not everyone is so sure Ma On Shan Rail will be a godsend for sleepy backwater areas of the New Territories
Real-estate agents are confident that the launch of Ma On Shan Rail will breath life into commercial and residential property in Tai Wai and Ma On Shan.
Midland Realty predicts a 15 to 20 per cent rise in rents for shops and offices in the district, while Centaline Property Agency predicts the new Ma On Shan link will result in a boom in the secondary housing market in New Territories East.
The line - 11.4km with nine stations and the main exchange in Tai Wai - will take commuters to Central from Ma On Shan town centre in 39 minutes.
An average of 100,000 passengers per day is expected when it opens at the end of the year.
Midland Surveyors director Ronald Cheung Yat-fai expected Tai Wai, a small, quiet township, to be transformed into a modern shoppers' precinct.
'I would not be surprised if shop rentals go up more than 20 per cent. The locations of the stations are good. Ma On Shan and Tai Wai will become more easily accessible and shopper flow will greatly increase,' Mr Cheung said.
Kim Ngan, a researcher at Centaline Property Agency's New Territories shops department, said:
'Tai Wai would have developed into a tourist destination but for the inconvenient traffic access. There are good restaurants for roast goose and there is the Che Kung Temple,' Mr Ngan said.
The optimistic comment came as agents raced to promote retail and office properties after the recent opening of the Tsim Sha Tsui rail link.
Agents reported a surge in property sales in East Tsim Sha Tsui with the opening of the link.
In anticipation of the infrastructure improvement, prices for flats along the rail route rose 5 per cent in the past few weeks, agents reported. Units at Sunshine City, Ma On Shan, are about $3,400 per square foot, up from $3,200 at the beginning of the month.
And some shopkeepers in Tai Wai were told to expect a 10 to 20 per cent rent rise.
But SK Pang Surveyors managing director Pang Shiu-kee warned against over-optimism.
'Ma On Shan is basically a dormitory town,' he said. 'Unless the new rail can draw a substantial number of outside people to the district, I do not see a very rosy future for shops there. Prices or rents are more often determined by the prevailing sentiment rather than the building of roads or railways. I am not suggesting that infrastructural projects are negligible factors. But during a slump, the price of your flat won't go up even if it is linked by three railways.
'But certainly the landlords would make use of the new rail as an excuse to increase rents.'
Grocer Michael Hui, who is paying more than $40,000 a month rent for his 400 square foot shop in Tai Wai, said: 'The landlord has hinted at a rent rise. I am afraid I might have to close the shop. The landlord says the new railway will bring in more people. But my view is that more people will go shopping in urban areas with the improved traffic connection.'
He has operated in Tai Wai for 11 years.
Fashion boutique owner Ada Hui, at Sunshine City, was cautious. 'Business has remained so-so despite the policy to relax mainlanders' travel restrictions to Hong Kong. I am not sure how helpful the new rail will be.'
Ms Hui said she had heard rents for many shops in the mall would rise when tenancies expired. Her tenancy expires next year.
William Ngai, a senior marketing manager at Midland Realty, however, was confident the outlook would be bright. 'It won't happen overnight, but it will happen quickly,' he said.
The optimistic outlook for the property market was similar to the forecast made ahead of the opening of West Rail.
But the West Rail is hungry for passengers and retailers are struggling for shoppers because of the poor passenger flow.
Opened last year, West Rail is a 30.5km railway with nine stations linking the northwestern New Territories with the urban centre. Kowloon-Canton Railway Corporation said it could take commuters from Tuen Mun to Nam Cheong in 30 minutes, but delays are common.
The rail was supposed to carry up to 200,000 passengers a day. But in May, the KCRC slashed its profit forecast by two-thirds to $300 million, attributing half the drop to the low usage of the line.
Shops along the rail route were hardest hit.
Mr Pang said the poor location of West Rail stations were to blame.
'Many stations are in the middle of nowhere,' he said, citing the Yuen Long station which is at the northern edge of the town centre.
At the Sun Yuen Long Centre, a Sun Hung Kai Properties mall next to the West Rail Yuen Long station, crowds are rare even on Sundays, according to some shopkeepers.
Penny Lam, who pays $1,000 rent a week for a booth in the mall selling home-made ornaments and accessories, said: 'The opening of the West Rail does not seem to be helpful. The rail link does not bring many people to the district.
'On weekdays, sometimes business drops to zero during 3pm to 4pm.'
There used to be another booth selling confectionery but it folded after two weeks, she said.
Mr Cheung said shopkeepers might have to wait another two or three years.
'When the properties near the railway stations are completed and more people are moving in, it may become better,' he said.