LuxeHomes 2017 Annual Edition

Lantau’s affordable ‘hidden gems’ are attracting investors

South Lantau’s ‘Riviera’ has developed close to Cheung Sha’s pristine beaches with two main sites, Whitesands and Botanica Bay

PUBLISHED : Friday, 01 December, 2017, 10:19am
UPDATED : Friday, 01 December, 2017, 10:18am

Lantau’s attractive but affordable lifestyle has increased its appeal. On the big island, South Lantau has attracted many investors and end users keen on luxury developments.

“South Lantau is a hidden gem,” says Kelly Merrick of Home Solutions real estate agency, which serves South Lantau and Tung Chung. “Lantau is still quite affordable. Every year, more amenities are added. We have a great choice in schools and numerous community activities.”

Alice Leung of Findley Leung, another local property agency, agrees, saying: “The attractions are the environment, fresh air, friendly residents and limits on private cars.”

The choice of schools is one reason why families pick South Lantau. There are four kindergartens, another in Tai O, and two primary schools, plus buses to Tai O, Discovery College ESF and Bradbury School ESF (after a quick ferry ride).

South Lantau has many properties from HK$2.5 million to HK$4 million, promising returns of 4 per cent to 6 per cent.

The luxury property market priced between HK$35 million and HK$200 million is still relatively affordable in a Hong Kong context. Investors have been buying these properties, and are able to lease them for significant rents.

The past two years have seen the emergence of the South Lantau “Riviera”, close to Cheung Sha’s pristine beaches. There are two main sites, Whitesands and Botanica Bay.

Botanica Bay, a luxury strip developed by Sino Land, was the first to open in 2015. It offered four-bedroom homes ranging from 3,725 sq ft to 5,573 sq ft.

One of the 3,800 sq ft villas sold for HK$109 million in April 2015, the first nine-digit property on the outlying islands.

A Botanica Bay property was leased for HK$136,000 per month in July – the first to be leased in the complex. It has a usable area of 4,191 sq ft, four bedrooms, four bathrooms and a 2,474 sq ft garden. Centaline Property reported the tenants were expatriates setting up factories on the mainland.

Fifteen homes at Botanica Bay have now been sold and it is expected that several will be leased out. The last sale, made in August, was of a 3,725 sq ft unit for HK$61.80 million.

In August 2016, Sino Land launched its low-rise Riverwalk development, which is for leasing only. It consists of 50 studio units, with one or two bedrooms, ranging from 255 sq ft to 1,103 sq ft and from 204 sq ft to 882 sq ft, respectively. Rental demand is strong; most units lease within a couple of weeks of becoming available, a local property agency says.

Whitesands, another premium residential property, comprising 28 detached houses, is Swire’s first residential development in South Lantau. The houses range from 1,954 sq ft to 2,598 sq ft of saleable area, excluding front/rear garden and rooftop space.

Market demand has been steady since April. Thirteen houses have sold at an average price of HK$19,815 per sq ft. Two houses have been leased.

“Most purchasers are end users looking for resort living style,” says Adrian To, director, residential, at Swire Properties. “Buyers appreciate the unspoilt beauty of the environment, the contemporary design, the brand and concierge services provided.”

Infrastructure projects such as the Hong Kong-Zhuhai-Macau Bridge and the airport expansion “are among the factors that attract purchasers to South Lantau”, To says.

Thomas Lam, senior director, head of valuation and consultancy at Knight Frank, says: “The scales for White Sands and Botanica Bay are not large enough to create a critical mass that makes significant impact to South Lantau, but they have boosted the popularity of Cheung Sha.

“Given Tung Chung’s conventional function is to serve Hong Kong as a satellite area to support economic development and satisfy housing demand, the current plan focuses on mass residential housing.

“There will be unique/featured residential units, which will be competitive to selected high-end units in the urban areas but in limited cases. Luxury units in Tung Chung will be smaller than WhiteSands and Botanica Bay.”

Merrick says: “We are optimistic about the long-term viability of property investment in South Lantau and Tung Chung.”