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SCMP Reporter

RESIDENTS of The Peak say they have never seen anything quite like it.

Breaking the usual daytime tranquillity surrounding some of the most expensive homes and mansions in town is the sound of grinding gears as noisy dump trucks lumber up and around the narrow roads.

Their destinations are the more than 20 construction sites that dot Hong Kong's most prestigious address; where chief secretaries, high court judges and consuls general rub shoulders with billionaire tycoons.

The Peak is synonymous with sumptuous, stress-free living complete with magnificent views. It is considered a unique oasis far from the incessant pounding and noise that most Hong Kong people count as normal.

But property development has come up the hill in an unprecedented way, shattering some of the perceived calm of The Peak.

Residents now have development projects on their doorsteps in spades. Big ones, like the Peak Tower and the redevelopment of Hongkong Bank's Cloudlands.

There are little ones too, as end-users gut their mansions and install the latest in designer kitchen-ware and jacuzzis.

There are also larger redevelopments, like Forrestdale on Plantation Road which has just been refurbished.

Some, like Nan Fung Development's luxury housing project on Gough Hill Road, are well under way. Others have just begun.

Long-time Peak resident Isabel Michie, head of residential sales for First Pacific Davies (FPD), said the number of redevelopment projects now going on or planned was 'unprecedented.' A quick tour of the area a few days ago uncovered at least 20 sites either being redeveloped or waiting for the wrecker's ball.

Demand for top-of-the-line luxury housing is probably the main reason that owners are redeveloping their Peak properties.

While much of the local property market was in the doldrums for the second half of 1994 and most of 1995, prices on The Peak did not suffer any noticeable downturn, according to estate agents. Demand would continue to be strong, they said.

The agents said the origins of this development activity were in 1993 and the early part of 1994, when the property market was booming.

Sale prices on The Peak jumped in many cases by more than 100 per cent. A luxury flat in the Strawberry Hill development that cost $8.6 million in 1991 cost $12.8 million in 1992 and $26 million in February, 1993, Grace Chan Kit-man, assistant director with property consultants Vigers, said.

By December 1994, the price had rocketed to almost $40 million, she said.

Estate agents recounted how old-time residents, faced with this price spiral bonanza and who were seeking to quit the territory or simply cash in their chips, decided to sell.

The buying frenzy was aided by the fact that The Peak is a relatively small area, and which has - by Hong Kong standards - a very low plot ratio of 0.05. This means that dense developments found elsewhere are forbidden, enhancing demand.

Apart from end-users keen to enhance their lifestyle with a Peak address, developers also saw that purchasing units on The Peak made good sense.

By and large, many of the homes did not use their plot ratios efficiently.

This meant that it was possible to buy an old-style, sprawling single family dwelling, tear it down and put up a low-rise apartment or a number of town houses on the same spot - and make a fortune.

In some cases, a developer could make 20 to 30 per cent profit, or even double the money, depending on the size of the plot of land.

That was certainly part of the motivation behind the likes of Wharf, Nan Fung and Amoy Properties investing in The Peak, estate agents said.

Not long ago, Amoy paid about $80 million for a site on Stubbs Road that was barren, except for a swimming pool. According to estate agents, Amoy would have little problem in recouping its initial investment when redevelopment started.

The 18-month downturn in the property market has also spurred developers to take a hard look at investing in The Peak for other reasons.

According to David Faulkner, a partner with Brooke Hillier Parker, developers are tackling slightly smaller projects these days.

Given the relatively small size of The Peak and the tendency for few property sales, any development activity is bound to generate a lot of excitement.

 Agents said many of these developments would have no problem in finding buyers when they came on the market.

According to Raymond Ho Wing-fai, executive director with FPD and an expert on the sale of multi-million dollar homes, the demand for housing on The Peak just keeps increasing.

'Remember these are rich people,' Mr Ho said. 'If the product is there, they will buy it.' 



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