New World Development woos Hong Kong home buyers with ‘Artisanal Movement’
Third-generation leader Adrian Cheng has upgraded the company’s properties by providing sustainability features, but analysts say home buyers are not yet ready to pay more for them
After giving Hong Kong media a two hour tour of the company’s Mount Pavilia residential development in Sai Kung on Sunday, New World Development vice chairman Adrian Cheng Chi-kong had the following message: “We are different from where we were.”
The third-generation leader of one of the city’s major developers launched what he called an “Artisanal Movement” five years ago, shortly after he was appointed executive director and joint general manager to take on the day to day operations of the group. Cheng, who was promoted to vice chairman in 2015, hopes the greenery, artworks and sustainability features in the company’s new developments can satisfy demands from new home buyers. Gone are the traditional gold or crystal decorations used by Hong Kong developers.
However, some analysts said home buyers are not yet ready to value such artisanal features.
“I will not describe all these sustainability features and artworks as marketing gimmicks, but I think the market is not yet ready to value them, or to value the company’s Artisanal Movement,” said Alfred Lau, property analyst at Bocom International.
“After all, buyers care more about their affordability and the living space inside the units, rather than the environment of the development,” said Lau. “But it is a successful brand building exercise.”
Incorporating the new concepts, Mount Pavilla is a 680-unit low-rise development in Clear Water Bay Road, with total saleable floor area of 985,158 square feet.
New World’s Cheng said the project, which was built on a 720,000 sq ft site in Sai Kung, features 340,000 sq ft of public space featuring gardens, playgrounds, a sculpture park and a sustainable eco-park with fish pond.
New World put 37 of the units up for sale this month and nine were sold by last Thursday, with an average price of about HK$20,000 per sq ft.
One flat, with an area of 1,841 sq ft, was sold for HK$40.5 million or HK$22,000 per sq ft – a record high for flat prices in Sai Kung and Clearwater Bay.
The company is tendering another batch of 47 flats and the tender will close on May 11.
“Our products have been improving over the five years, from those in Yuen Long, Pavilia Hill in North Point on Hong Kong island to Mount Pavilla in Sai Kung,” said Cheng.
Bocom’s Lau agreed the company’s products have seen improvement, but in other ways such as building quality, floor plans, layout and overall design.
“They gained in market recognition,” said Lau, adding that the company has built up a strong property management team after recruiting professionals from rivals such as Sun Hung Kai Properties and Sino Land about seven years ago.
The improvements have enabled New World to charge a premium for their products compared with some of the other players in the industry, he said.
Thomas Lam, head of valuation and consultancy at Knight Frank, said the sustainability features helped the company differentiate itself from other property players amid intense competition and increased new flat supply.
The supply of new private housing will increase by 2 per cent to a record 96,000 units over the next three years, according to the Transport & Housing Bureau’s latest quarterly data released on April 28.
“The sustainability concept is more suitable for high end products. General home owners are working day to night so they may not have much time to enjoy those features,” said Lam.