Hong Kong’s Peng Chau seen as cheaper alternative to Discovery Bay
Located eight kilometres west of Hong Kong Island, Peng Chau island could potentially serve as an alterative to nearby Discovery Bay’s expensive houses, offering sea view and a quiet environment at much lower cost, property agents say.
Only a 30-minute ferry ride to Central, the one square kilometre island could potentially attract the overflow of leasing demand from Discovery Bay, said Ingrid Cheh, associate director of research at JLL.
“The median monthly domestic household rent in Discovery Bay is as much as HK$21,000 so Peng Chau’s new projects could potentially present more affordable rental alternatives,” she said.
Cheh said the leasing market on the island is primarily supply-driven. “The provision of high quality supply...could draw more leasing and investment interest in Peng Chau,” she said.
New developments include 54 homes at Sino Land’s Paloma Bay and 10 at Paloma Cove, as well as other projects in the pipeline such as 40 units at Well Power Electronics’ Peng Lei Road project and four stand-alone homes by Ocean Gain Construction and Smart Champion and an estimated five units from Agile Property and Sino Kingdom.
Besides Sino Land’s projects for lease, and those in the pipeline, there has not been any new private residential supply in Peng Chau for at least 15 years.
“The market situation is like a pool of stagnant water,” said a local property agent surnamed Yuen.
Recent sales in the secondary market in Peng Chau have included units in Monterey Villas going for about HK$5,100 per sq ft of saleable area and units in Sea Crest Villa selling for about HK$ 7,100 per sq ft of saleable area.
Cheh said Peng Chau could potentially ride on the back of the Hong Kong government’s initiative to develop Lantau, including Siu Ho Wan, East Lantau Metropolis and the Northeast Lantau Tourism Gateway, all part of the Sustainable Lantau Blueprint.
A Peng Chau government land tender in February 2012 only received two submissions.
Sino Land ultimately won the plot for only HK$516 per square foot, far below the market estimate of about HK$2,000 at that time, making it the lowest land price for the outlying islands in six years.
Together with another plot of land it won at tender, Sino developed Paloma Bay and Paloma Cove for lease only.
A Sino Land spokeswoman said about half of Paloma Bay is occupied, with 30 per cent of the tenants from other countries.
Sino Land chose to develop in Peng Chau because the location is not far from Central and there has been no new supply since 1997, the spokesperson said.
Paloma Bay comprises two villas, each with two floors and a roof, and 52 flats and duplexes across 26 low-rise blocks, with a private garden or rooftop terrace on each block.
Villa sizes range from 1,342 to 1,349 sq ft offering three bedrooms, while flats range from 628 to 652 sq ft with two bedrooms. Monthly rentals at Paloma Bay start from HK$15,800.
“We are confident that Paloma Bay will be popular,” said Maria Lam, assistant general manager of leasing at Sino Group.