MTR line set to transform industrial district
Prices of sites in industrial district Wong Chuk Hang are soaring, and the area is likely to see significant change with a new MTR line being built nearby.
'Prices and rents of the industrial buildings in Wong Chuk Hang used to be the cheapest on Hong Kong Island - cheaper even than Chai Wan,' said Gary Leung, sales director of the industrial department at Centaline Property Agency.
'During the Sars outbreak prices plunged to between HK$100 and HK$200 per square foot,' he said.
But in the last two years the area's old buildings have fetched Hong Kong Island's second-highest prices for industrial property, after Quarry Bay, because of the South Island Line development. It will take just four minutes to get from the new Ocean Park station to Admiralty when the line is completed in 2015.
'Prices in the area lagged behind other industrial districts because of traffic congestion at the Aberdeen Tunnel. But now investors are anticipating that problem being fixed and a facelift for the area when the new line's up and running,' Leung said.
The average price of an industrial building in the area is now higher than that of Chai Wan, at HK$4,000 per square foot, but rents are on par.
Big developers such as Swire Properties, Cheung Kong, Sun Hung Kai Properties, Henderson Land, Chinachem and K Wah International all own industrial sites in the area. Many of them got approval six to seven years ago to redevelop the sites into hotels or office buildings, but as yet only a few have gone ahead with their plans.
As the completion of the new MTR line draws near, this is expected to change, with a number of developers resurrecting plans, Leung said.
In November Sun Hung Kai Properties was cleared to redevelop its site at 50 Wong Chuk Hang Road into a 31-storey commercial tower.
Henderson Land paid a premium to convert its site at 19 Wong Chuk Hang Road into offices, and Cheung Kong also paid a premium to develop office space on Heung Yip Road.
Leung said premises such as the BT Centre, The Factory and the Kwai Bo Industrial Building had recently seen increased interest from retailers. 'The district is changing. The new housing estates have brought new buyers for the retail market. Also, Horizon Plaza in Ap Lei Chau is fully occupied, so there's more furniture and art retailers moving in,' he said.
Given its location close to Ocean Park, hotel developments are also on the cards. The owner of the Perfectech Centre in Wong Chuk Hang Road has been approved to convert the building into a 24-storey hotel with 98 rooms. Last week it applied to increase that to 162 rooms.
The prospect of the area repeating the success of Quarry Bay is now a selling point for vendors such as Coda Properties. Chairman Richard Tong said an investment fund had offered HK$620 million for its Coda Designers Centre. 'Now I'm looking for HK$650 million,' he said.