How Lee family property play makes Causeway pay
A district now synonymous with teeming crowds of shoppers was a costly but winning bet for one of Hong Kong's most influential dynasties
Causeway Bay is better known for being home to some of the world's most expensive retail property than it is for being steeped in history.
And it's a little known fact that the district was dominated by a single family for a good part of the past century: the Lees, widely regarded as one of the four most influential families of the colonial era.
It's hard to say whether patriarch Lee Leung-yik could have imagined all of that before he set sail across the Pacific Ocean from his ancestral village of Kaiping in Guangdong province, to San Francisco - then a frontier city - 123 years ago.
Emigration from Qing-era China was illegal, and he was already 49 years old.
"Times were difficult in China and my great-grandfather was looking to strike it rich in the California gold rush," says Vivienne Poy, Lee's great-granddaughter. "He wanted to make enough money to support the family back in Kaiping."
Speaking with the South China Morning Post, the historian-cum-fashion designer turned Canadian senator explains the family's history and heritage with great vitality. She retired from public service last year and now resides in Toronto.
The Lee bloodline can be traced as far back as 1122BC, to the reign of the Zhou dynasty. But it was Lee's voyage to the New World 3,000 years later that would mark a turning point for the family and pave the way to their founding of one of the city's most prominent family enterprises.
After picking up English and making a small fortune, Lee left California in 1896 and eventually relocated his family to Xinhui and then to Hong Kong. He started a textile importing business named Lee Cheong Loong at 202 Queen's Road, in Central, a site that today is occupied by a block of serviced apartments.
"This was an amazing feat for an ethnic Chinese man in the colony at a time when few locals even knew how to start a private company," Poy says.
But fibre and fabric were not where the real money was being made. From textiles, the Lees soon moved into the opium trade, a controversial but legal business at the time, which contributed generous sums every year to the colonial government's coffers.
It was Lee's second Lee Ting-sien who changed all of this. Born and raised in Kaiping, Guandong, Lee Ting-sien, later to become known as Lee Hysan, studied in Britain for most of his early life and returned to the colony for education at the prestigious Queen's College. He was student number 6,707.
"Networks with well-off classmates and other ethnic Chinese elites gave him the leg up the social and commercial ladder," Poy says.
He apparently provided champagne every year at the Old Boys' Dinner; that bubbly was later dubbed "Lee Hysan Joy Juice".
After the younger Lee completed a successful stint managing a shipping company, the reins of the family business were handed over to him. He injected capital, expanded the business and began importing cotton from Shanghai.
"This was the 1920s we're talking about, and grandfather was a very progressive thinker for his time," Poy says. "He knew there were more Chinese people coming to Hong Kong, and so he started investing in places for living and for business."
Entrepreneurial, astute and with a passion for property, Lee Hysan knew the colony would continue to grow and prosper as more migrants flocked to it from the crumbling remnants of the empire up north. He invested in companies such as China Light and Power, Dairy Farm and Hongkong Tramways. And he made his biggest bet on a growing real estate boom in a district known as East Point - later to be named Causeway Bay.
His most significant land acquisition was a heavily leveraged buyout of Jardine Hill from the Jardine Mathesons, a rival, British-based trading group, in 1924. The parcel of land was later to become the site of the Lee Gardens, which today comprises the Lee Theatre, the Leighton Centre and the newly built Hysan Place shopping mall.
It was an investment that would pay big dividends.
The Lee Hysan Estate Co was incorporated in 1924, as the forerunner of today's Hysan Development Co. With a market capitalisation of HK$35 billion and a combined office, retail and residential portfolio of 4.7 million sq ft, it is one of Hong Kong's few publicly listed enterprises that is still majority family-owned and still operating.
"It was a family company to begin with and, to this very day, it is still run as a family company," Poy says. "Every person in the family is entitled to a shareholding - the sons, daughters and even concubines [who lived with the family under the same roof] held shares."
The founding of the Hysan Development Co coincided with a decline in the family's drug empire. After extending its monopoly on the opiate market to Macau, a run-in with the Portuguese enclave's colonial rulers led to the abrupt withdrawal of the company's licence in 1927 - it had allegedly sold its licence to a Macanese entity.
Lee took the Macau government to court. After a year-long legal battle, the court ruled in favour of Lee - a result that preceded both triumph and tragedy. On April 20, 1928, Lee Hysan was fatally shot on his way to the Yue Kee Chinese Club on Wellington Street, Central.
Lee Hysan, the "King of Opium", died at age 49. His assassination was never solved and no relationship between the court ruling and his murder was ever proved. An article in the Post dated May 1, 1928, described his killing as one of the most sensational crimes ever perpetrated in the colony.
Although Lee did not live to see the massive transformation of Causeway Bay, his property empire continued to flourish.
Unlike other family businesses, which often implode as control is passed from one generation to the next, fall victim to infighting or are bought out by deep-pocketed outsiders, the Lees' business has remained tightly in the grip of the family. The Chinese proverb that says fortune does not last three generations hasn't rung true in the Lees' case.
Today, the group is still chaired by a member of the Lee family and at least three other founding family members maintain seats on its board of directors. Shares that are owned by family members can be traded only among family members.
Like other big family clans, the Lees are separated into "branches", with each one represented by a family head and given equal representation on the board. The branches are all looked after by one central office.
"This model of equity within the family has been key to preventing family feuds," Poy says. "It's rare for there to be no infighting in such large families. How many family-owned companies of this size in Hong Kong do you see still working together like this after 90 years?"
After the demise of Lee Hysan, 23-year-old Richard Charles Lee, or Lee Ming-chak, his eldest son, suddenly became head of the entire Lee clan. He continued to expand his father's growing business empire, and his friendships with the Japanese helped bring in much needed investment, starting with the Daimaru department store in 1960.
He also played a part in public service, both in Hong Kong and on the pre-revolutionary mainland. He served in the Guangzhou provincial government as chief secretary, chief engineer and head of water works. He was a member of the Legislative Council from 1961 to 1966, a period during which, Poy says, he "helped the colony to strengthen ties with Europe, the mainland and colonial governments, all the while growing the family business and dedicating himself to philanthropy and education".
Richard Lee spoke out on the lack of affordable housing and the growing spread of squatters. He also called on the government to speed up the process of moving more people into public housing.
"My father followed a 'people first' method of running a business, in that whatever he did, it had to have some benefit to the community," Poy says.
"He believed that when you start a large company, it had to be profitable not only to the shareholders, but also to the employees and to society."
The Lee family's roots run deep in Hong Kong, and its influence is everywhere. But the true centre of its legacy is Causeway Bay, where it all started.
"I'm proud of being a member of the Lee family and I believe my grandfather has built the reputation and brand he set out for," Poy says.
CORRECTION: An earlier version of this article said Lee Leung-yik had sailed to San Francisco as an indentured labourer. Lee did not. The article also said Lee Hysan was raised in Hawaii. He was born and raised in Kaiping, Guangdong province.