Clubs come up trumps
West Kowloon has dominated headlines, thanks to a stream of news items ranging from record-breaking apartment prices to the debate over its proposed cultural district. As a result, a similarly exciting locality on the peninsula is easily overlooked.
The mammoth redevelopment of the old Kai Tak airport, with a planned world-class cruise terminal, could potentially turn East Kowloon into the next West Kowloon.
Although the district has historically been off the radar of the most expensive addresses, developers are aware of its potential and are building top-class properties there.
One of the newest is Aria - Kowloon Peak by Sun Hung Kai Properties, a 723-unit development near Choi Hung MTR station.
'Aria is positioned as the new exemplar of world-class luxurious residence,' says Amy Teo, project director - sales at Sun Hung Kai Real Estate Agency.
'Supply of new residences, especially luxury units, is lagging behind demand. With its unique location and views, together with the government's development plans for Kai Tak and southeastern Kowloon, the property carries sound potential,' Tao says.
Besides the cruise terminal, the Kai Tak redevelopment is expected to include hotel, retail, office and sporting venues, making it a 'new Tsim Sha Tsui'.
While future developments in the district have to wait, Aria is offering something immediately available - a residential clubhouse that costs HK$500 million.
The clubhouse is in two parts. The mezzanine floors consist of indoor and outdoor swimming pools, a restaurant and a library. Another multifloor clubhouse starts on the 37th floor, where a gym looking over Victoria Harbour is complemented by a bar.
Terry Ng, senior district sales manager for East Kowloon at Midland Realty, says such value-added facilities are what the market demands today.
'Customers do not mind how much they pay, they are looking for quality. The expectations of homebuyers have raised, and obviously developers have conducted market research before planning the project in order to satisfy customer demand,' she says.
'Homebuyers are looking for properties with a strong resale value, and they are very concerned about the clubhouse. Restaurants and entertainment facilities are also important. The market has an unspoken rule that better facilities, such as clubhouses which cater for children and adults, will lead to a better resale value.'
'Sha Tin and Tai Wai are locations that are gradually moving closer to luxury,' says Roy Choy, regional sales director - Sha Tin at Centaline Properties, pointing to the cluster being formed by luxury developments such as Hill Paramount by Henderson Land, Peak One by Sun Hung Kai Properties, The Great Hill by K Wah International and Palazzo by Sino Land.
Festival City at Tai Wai is one of the closest developments to Kowloon, just one MTR stop from the traditional luxury district of Kowloon Tong. It also has a lavish clubhouse - Club Festival.
'For every project we try to bring something new to the clubhouse, which will add value to the property and improve the image of the company,' says William Kwok, director of Cheung Kong Real Estate, the developer for Festival City, which has about 1,300 units for phase one.
With 620,000 sqft of indoor and outdoor facilities, including swimming pools, bowling alleys and a 10,000-litre aquarium, its clubhouse is the largest of its kind in its district.
Despite the impressive clubhouse, Kwok believes convenient transport is the strongest attraction of the development.
'Geographically, Festival City is right at the centre of Hong Kong. It's along the main East Rail MTR line and is just one stop from Kowloon Tong. It adjoins the Ma On Shan line, and the future Sha Tin-Central MTR line will bring even more convenience. The highway network is impressive too. You can drive to West Kowloon in about 10 minutes,' Kwok says.
Hong Kong's geography doesn't specify which are luxury districts and which are not. Traditionally, there is a difference. But for a new location, whether it belongs to a luxury district or not depends on several factors.
'Firstly, location. Is it convenient? Secondly, the view the property enjoys. Thirdly, people in the neighbourhood. New districts can develop close to traditional luxury districts. It is impossible to replace them, but we are getting close to matching them. Even if the location is not traditionally luxury, it can be positioned as an upper-middle level because of its quality,' Kwok says.
He says about 5 per cent of the buyers are mainlanders, but he expects more people from north of the border will be interested in the property, eventually reaching 10 per cent of total sales.
'The policies to cool down the market are making it difficult for Chinese investors to make a reasonable return on the mainland. The cost is very high when buying property on the mainland. Mortgage rates in China are 5 to 6 per cent, while in Hong Kong it is about 1 per cent, so Hong Kong property is very attractive to them.'
Kwok is optimistic about the property market, believing the local economy will perform better this year than last.
'Hong Kong property is more likely to rise than fall. I expect a steady and improving market with prices rising about 10 per cent for the year.'