image

Weekend Property

Life on top of the world: The Peak’s pricey real estate is the exclusive domain for the rich and famous

Luxury properties on Hong Kong Island’s ‘wealth mountain’ have long been the preference of the city’s tycoons

PUBLISHED : Friday, 08 July, 2016, 12:11pm
UPDATED : Friday, 08 July, 2016, 2:18pm

Those with the deepest pockets on Hong Kong Island aspire to live on “wealth mountain”. With an elevation of 552 metres, The Peak is as famous for its iconic views as it is for its pricey real estate.

No stranger to any list of expensive property globally, The Peak claimed a world-beating HK$930,670 per square metre a few years ago for an apartment at Skyhigh on Pollock’s Path – relegating Kensington Palace Gardens in London, Britain, where the young Royals live, to second place at US$107,000 per sq m, and Avenue Princess Grace in Monaco to third spot (US$86,000 per sq m).

Severn Road had claimed the price title for the two previous years, according to separate analysis.

Headline-grabbing sales mark The Peak’s property price history, such as the reported HK$1.5 billion sale of 22 Barker Road in August last year (or HK$150,000 per square foot) followed Sun Hung Kai Properties’ August 2014 offering of 12 houses at Twelve Peaks on Mount Kellett Road for HK$819.1 million, at prices ranging between HK$107,529 and HK$112,808 per square foot, and the rare sale of a 124,000 sq ft land parcel at 75 Peak Road at HK$5.1 billion or HK$82,258 per square foot.

However, times are tough these days, even for billionaires. Last November, the last apartment in Swire Properties’ Frank Gehry-designed Opus Hong Kong on Stubbs Road sold for HK$509.6 million, or HK$93,609 per square foot, which analysts said at the time was below expectation.

Extraordinary views of harbour and city are The Peak’s most famous attraction, admired by millions of visitors each year. Yet, according to local legend, it wasn’t the views that first drew the city’s elite to ascend the mountain in search of a home, but a desire to escape the stifling summer heat.

According to David Ji, Knight Frank’s director of research and consultancy for Greater China, last month’s HK$2.1 billion sale of 15 Gough Hill Road to a mainland real estate tycoon reflects a view among ultra high-net-worth Chinese that a luxury property in Hong Kong, being closer to home, is “more manageable” for their investment portfolio than a high-end property in say London.

With no new sites, the only option for development is to transform old buildings into new ones
Buggle Lau Ka-fai, chief analyst, Midland Realty

Buggle Lau Ka-fai, chief analyst at Midland Realty, says that The Peak is still one of the most desirable places to live in Hong Kong. “It is definitely one of the most prestigious luxury residential areas, there is no doubt about it. [Demand for] a location right at The Peak, enjoying a good view with low density, will likely continue into the future,” he says.

However, supply is extremely limited. Over the past three decades, while improving infrastructure has seen development focused on the New Territories and West Kowloon, including the emergence of new luxury areas, on The Peak there is “no such land available”, Lau says. “With no new sites, the only option for development is to transform old buildings into new.”

Of the 92,000 new units forecast to come on stream in Hong Kong in the coming few years, Lau says, citing government figures, only 200 can claim a Peak address.

Uncertainty surrounding the yuan may make such scarce, superluxury properties even more desirable for wealthy mainland tycoons.

Centaline Property Agency regional associate director Eric Lee agrees that The Peak’s inherent qualities endure. Though the supply of deluxe houses is limited, if you’re in the market for a rental, there is more choice.

“The number of high-ranking expats with a rental allowance of HK$500,000 to HK$600,000 has reduced in the past few years,” Lee says. “Some deluxe houses are becoming available, such as 35 Mount Kellett Road or 54 Mount Kellett Road. Even those in the HK$300,000 to HK$400,000 range are listed on market more frequently [now].”

As for those in the HK$100,000 to HK$200,000 rental bracket, he adds, newly arrived expats “may prefer to rent a brand-new apartment over those older townhouses or big apartments in the traditional Peak and south-side areas”.