Move East helps Dillon climb the property ladder
For Canadian marketing man Chris Dillon, the long march to becoming a property owner and investor in Hong Kong began 21 years ago when his partner Laurel Dillon said she hankered to leave their chilly home in Calgary and head eastwards in search of the rising sun.
Laurel set off on her voyage shortly after the two first met at the 1988 Winter Olympics in Calgary. Dillon followed a few months later and the two spent three years in Tokyo before making their way to Hong Kong where he worked with Metro Broadcast Corp and a public relations firm, before setting up his own public relations firm.
'In early 2002 the lease on my office was up for renewal. Business was good and paying rent was losing its appeal. Why not buy an office, I thought.' So he spent HK$1 million to buy an office floor in Central.
'The previous owner had paid HK$18 million for five floors. How much could I lose?'
His second foray into the property market came during a bad year for the property market in 2004, one year after the Sars outbreak that caused property prices to plunge 70 per cent from the October 1997 peak.
He used the opportunity to buy a four-bedroom 2,200 square foot flat in a 30-year-old building in Pok Fu Lam for HK$11 million. He has no plans to sell the property, which provides accommodation for his family, which has grown to five since he and Laurel married in 1993.
But a year after buying the flat he spent a further HK$1.8 million for a 3,500 sq ft factory unit in a 30-year-old building in Wong Chuk Hang, Aberdeen.
In April last year, he sold the Central office space for HK$4.5 million and now uses half of the space in Aberdeen as the headquarters of his business, renting out the remaining studio space for photo-shooting by magazines. 'An upper floor in the building of the same size was recently sold for HK$7.8 million,' he said.
However, he has no plans to sell, but is waiting for bigger profits to come once the upgrade of the neighbourhood is completed. Wong Chuk Hang has attracted the interest of developers, who have received planning approval to build hotels. Some have changed former residential blocks into office buildings.
So has he made any mistakes in property investment so far and what advice does he have for budding investors?
'Find the ugliest property in the nicest neighbourhood. That will give you the best growth potential,' he said, echoing the oldest saying in property investment, namely the three golden rules: location, location, location.
Dillon stuck with this formula, buying his first property - a nine-year-old grade B office space on the fringes of the Central business district - that had stood vacant for some time and was unfinished, with a bare concrete ceiling that leaked.
'Luck always plays a role in the way life works out. But doing your homework, being realistic in your expectations and investing conservatively are very important too. It also helps to have the courage to sell when others are buying, and vice versa.
'Buying property in Hong Kong is straightforward and easy. The legal system is good and the market is transparent.'
Other attractions included the absence of foreign exchange controls and capital gains taxes.
Dillon recommends Kennedy Town and Sheung Wan for a serious look. So what is his next target?
'I am thinking of one. But this time it will be in Japan. The Japanese property market will pick up.'