Personal space

PUBLISHED : Friday, 25 January, 2008, 12:00am
UPDATED : Friday, 25 January, 2008, 12:00am

Wong Chuk Hang Road is an unrelenting strip of smog-stained glass and empty industrial buildings, most decorated with hopeful 'for sale' signs in bright colours. Yet for part-time property developer Chris Dillon the place has real potential.

'Look at this,' he says, gesturing out of his vast, light-filled office at a large green area outside. 'We get egrets nesting in that tree! That sort of a view is the last thing that you'd expect from this neighbourhood.'

Dillon, who runs a small corporate communications firm, has developed three properties in the past six years, including his four-bedroom family home in Pok Fu Lam, and he has just published a book, Landed: An Expatriate's Guide to Buying and Renovating Property in Hong Kong.

As an English-speaking expat, he trod the road to renovation more or less alone, and his message is that where it was possible before, it's even easier now.

'When I started looking into this, there were just marketing materials prepared by people like real estate agents who had a horse in the game,' he says. 'It occurred to me that if you did write something from a neutral perspective it might be useful for people.'

The 3,500 sq ft Wong Chuk Hang office - his firm's headquarters and a rental space for photographers - is his latest project, and though it seems isolated now, it will be well placed when the proposed South and West Island MTR lines eventually open. Talk of hotel developments and neighbourhood revitalisation has given the area, near Ocean Park, a new buzz.

Dillon started his business with a more conventional project. 'In 2002, the property market seemed to be near the bottom, and I was operating out of a rented office on Hollywood Road. I had the cash ... so I felt, why not buy an office? That way I won't have to pay rent.'

He found the process of buying the office, a Grade B space (slightly less expensive than prime real estate) in Central, much easier than he'd anticipated. Only New York and London tend to top Hong Kong's premium property prices, but as Landed notes, it's a liquid real estate market and there's plenty of money sloshing around.

There are also no foreign exchange controls, capital gains are not taxed, contracts are in English and the legal system, based on English law, is easy to negotiate. 'It's a dance where everybody knows the steps,' Dillon says. 'Contrast that with a place like Thailand or Indonesia where there are foreign ownership restrictions ... plus here you don't have military coups, assassinations. Hong Kong is pretty good that way.'

For his first property, Dillon employed a designer, who hired a contractor, and the simple interior refit went well. He paid a little more than HK$1 million for a 1,000 sq ft space and spent about HK$200,000 on the renovation. Soaring property prices resulted in great returns. This gave him the confidence to tackle his southside family home two years later with a contractor recommended by friends.

Since the contractor used CAD (computer-aided design) software, the pair were able to work mostly through sketches and renderings of the 2,200 sq ft flat. It was in a 30-year-old building and needed, among other things, complete rewiring, a new kitchen and floors, windows, air conditioners and plumbing. The book notes that interior designers tend to add 10 per cent to 20 per cent to your renovation costs, but they can be useful on various levels, from lowering material costs and doing leg work, to helping transform your 300 sq ft living room into something from Architectural Digest.

Though it was tempting to consider the Wong Chuk Hang property as a living space, Hong Kong's strict zoning laws would have thrown a spanner in the works, as would the market's lack of creativity. 'In Hong Kong, we tend to value conformity,' says Dillon.

'When you buy a property you're always looking at selling it on, and something unusual will limit you.

If you contrast this office with a 400 sq ft flat that costs roughly the same amount of money, that's infinitely easier to sell on. This you're selling on to a small market.'

Landed is a technical read, and Dillon's advice ranges from stamp duty rates to questions to ask your contractor. However, his biggest lesson, he says, was practising flexibility. 'Your designer and contractor will be professionals, but you're dealing with small-business persons; they have busy periods, quiet periods, cash-flow problems, fights with their spouses,' he says.

'And sometimes problems with the renovation won't become apparent until walls are torn down. You've got to roll with the punches. Taking out your frustration on a designer or contractor is usually self defeating because these are people who can basically make it happen for you.'

This also ties in with two other important aspects: good communication and good manners. The first, Dillon says, is the full responsibility of the owner, and pains must be taken to get past any language barrier.

Architecture and interior design books and magazines can be a good source of inspiration. In one magazine, for example, Dillon took the idea of using sail cloth as a partition for his office space. Other aspects, from informing your neighbours about construction noise, to thanking contractors for unsuccessful bids, are also undervalued in Hong Kong but can make a difference down the line.

For Dillon, the secrets to his successes were knowing his own mind, and being willing to put time into each project. His last contractor, whom he describes as an old-school craftsman, could barely speak English, yet they turned an old steam laundry into two bright, lucrative spaces in a month.

'I would say it is possible for an expat to do that, but bear in mind that you've got to be realistic, and you've got to be informed,' Dillon says, 'whether that's by going online, or walking down Lockhart Road and looking at 100 toilets in the course of an afternoon.'

In other words, the key to managing a great renovation project is managing your own expectations first.