Warehouse district develops in style
Ageing warehouses, petrol stations and delivery trucks lined up outside garage doors typify the facade of downtown Wong Chuk Hang.
The main drag -a stone's throw from Aberdeen and Ocean Park and skirting the island's prestigious Southside- is not widely known as a lifestyle destination.
Yet there is a slow but sure change under way, thanks to the impending arrival of an MTR station (due for completion in 2016), Central's rising rents and lack of space.
Already, a steady arrival of lifestyle-centric small businesses -art galleries and studios, design and wine stores, homewares and fashion designers in need of space, cheaper rents and display areas- are taking early advantage of loft-style spaces, proximity to upmarket suburbs and a 10- to 15-minute drive to Central.
'The area is quite hot' for this kind of business, says Willis Mak Tze-hing, senior director of investment services for Colliers International, primarily because of the warehouse atmosphere, tourist areas such as Repulse Bay on its doorstep and the upcoming MTR station. 'I definitely see the creative aspect of it growing. But, it will be gradual.'
As in other cities, decrepit warehouse districts close to the city centre (New York's Meat Packing district, for example) provide an aesthetically antiquated, open and bright atmosphere ripe for renovation and artistic innovation. In turn, they become a hot spot for designers, artists, studios, quirky gift stores and eventually, inspired dining establishments.
Closer to 2016, Mak says food and beverage outlets will be introduced to Wong Chuk Hang, further attracting deeper pockets within Southside's residential areas.
'I think Stanley [a major tourist destination known for shopping and dining] may suffer,' he says. Stanley is another 15- to 20-minute bus ride away and will not be on the MTR line.
Mak says many developers such as Swire Properties and Sun Hung Kai Properties are taking a wait-and-see approach until rents increase.
For now, new tenants are simply taking advantage of space at a better price and the knowledge they are creating a 'destination' known for its creative elements. 'Large spaces, lower rents and less direct competition allow business owners in Wong Chuk Hang more room for creativity and to take interesting risks to push their business concepts,' says Heather Thomas Shalabi, co-director of Flex Studio, a health and fitness centre that also sells leisure wear brand Tulaa. Flex opened there late last year after spending five years in Stanley.
'Businesses [in Wong Chuk Hang] can expand in ways they would be unable to in Central. The strategic location straddling major residential areas is really proving to be an asset,' she says.
'Being here, we find we still get people from Southside, but can also tap into Pok Fu Lam and The Peak. And because business owners here are staking out new territory, we benefit from the synergy of being in the same neighbourhood.'
Eventually, she adds, when more consumer-related operations are introduced to complement the MTR, restaurateurs will move in.
A similar 'creative centre' vision is shared by Paul Fung, director of modern Scandinavian furniture design company Manks Ltd, which opened a showroom in the area in January. 'A loft environment is suitable for showing off the design furniture and lighting we offer,' says Fung. 'We also wanted to reflect the cheaper rent here by lowering the price of our pieces compared to stores in prime commercial neighbourhoods.
'We can see this area transforming into quite a trendy district in a few year's time.'
Elsewhere, Burnt Oringe -a green certified, fine linen supplier and retailer- opened its showroom in Wong Chuk Hang in April last year. Owner Tarynn Hatton-Jones had looked in Central and was put off by the cost.
'We were looking for fabulous space at reasonable expense,' says Hatton-Jones. 'Our aim was to find a showroom with optimal natural light to accentuate our product ... and moving into Central would have forced us to increase our retail costs.'
Also opened late last year is Mirth Home, selling homewares, gifts and children's items.
'Hong Kong has so few areas where you can get big open-plan spaces with lots of natural light and oozing with character. Stores in Hong Kong often have great products, but because the space is so small, it's difficult to show them off,' says co-owner Kylie Platt.
'In the great cities of the world, there is an industrial area that has turned into retail/residential areas and we see Wong Chuk Hang has the most going for it; surrounded by residential and cool buildings to boot.'
Clinton Mong, owner of home decorative accessories store and gallery, Simply Decor, says he positioned his business as an outlet-style gallery and needed space for display.
'A 2,400 sq ft shop in Central or a mall would cost a fortune,' he says. 'And Wong Chuk Hang is one of the areas in Hong Kong with a lot of middle- to upper-class residents.'
According to Colliers' Mak, the asking price in Central ranges from HK$30,000 to HK$150,000 per square foot compared with HK$6,300 to HK$8,000 in Wong Chuk Hang.
Mong says clients tell him the studio is more convenient for them than nearby Ap Lei Chau.
Elsewhere, Mimi Gradel, the director of Blindspot Gallery -a small gallery space in Central- has recently opened Blindspot Annex. 'Wong Chuk Hang is a convenient location compared with other industrial areas such as Kwun Tong. I hope we can eventually build a little arts hub [here]. I do hear some art institutions looking around already.'
Contributing to this artistic image of the area is the building The Factory, which offers workshop space (Manks takes up a whole floor within it and Simply Decor is also a tenant). Developed by K. Wah Real Estate, The Factory is the first visibly artistic building, thanks to its eye-popping comic book-style facade designed by Italian comic artist Mauro Marchesi.
Not everyone is as enthusiastic yet, however. Lau Chun-king, international director and head of valuation advisory services at Jones Lang LaSalle, says it is early days to predict if Wong Chuk Hang will become a thriving retail area.
'Upon the availability of the MTR services, Wong Chuk Hang is expected to become a more vibrant location to do business. Various new redevelopments would also be completed by then, which will bring in more opportunities,' says Lau.
'[However] we are not aware of consumer-based businesses moving into Wong Chuk Hang at the moment,' he says, although conceding that there have been 'some increases in population due to some new developments.'
Those there now will have to wait for associated consumer operations (food and beverage, for example) to join them. 'As more retail outlets open, I think [the area] will have less of an industrial feel,' says Nicole Darragh, owner of children's clothing business Hip Little Bubba, which opened there in April last year.
'With the opening of L'hotel [last year by Chinachem] and similar businesses, I believe this is an up-and-coming area.'