Old buildings now attract developers

Billy Adams

THE changing face of Hong Kong's prime business district continues to alter at a quick rate - but not as fast as the developers would like.

From the viewpoint of the Star Ferry at Tsim Sha Tsui, the island skyline looks substantially different to what it did 15 years ago.

Structures like Exchange Square, Bank of China tower and, if you go out a little further, Central Plaza, have made a huge impression.

But landlords of some of the older residential and office buildings in Central are still doing their best to frustrate some of the top developers.

''There are a lot of buildings where the plot ratio hasn't been fully utilised and there is good redevelopment potential,'' said K. S. Koh, a director of First Pacific Davies.

''The problem is that the landlords know they are valuable and are asking excessive prices.

''Of course, the developers are not interested in paying over-the-odds.'' In Hong Kong, the bulldozers have moved in with a vengeance.

Now, driven by the high prices that have been achieved this year, it looks like another bout of major surgery is set to take place.

Developers are making bold moves to acquire older buildings, particularly in Queen's Road Central. At the bottom of Wyndham Street, Evergo's new gothic-looking structure, the Entertainment Building, is almost complete.

On the opposite corner, Shell House and adjoining Hart Lane House are both to be redeveloped by Central Development.

Some industry watchers believe a company has bought the Far East Exchange Building, just behind Shell House, from Evergo for about $500 million.

China Entertainment Strategic Investments, part of the Evergo group, bought the 5,340-square-foot property from Strong Root for $230 million in 1988.

A number of potential buyers are being touted in the market. Although no one seems to be certain about what is happening, Central Development is being pitched as the favourite.

One property analyst said: ''It would make a lot of sense. Central Development would then have more space and obviously more development opportunities.

''But some people think the $500 million tag is way outside expectations.'' The two companies failed to respond to enquiries from Property Post.

Laura McAllister, owner of the Mad Dogs bar, which is located in the building, said she knew nothing of any deal.

On the other side of Queen's Road, opposite the Entertainment Building, the Luk Hoi Tong Building is also to be demolished and rebuilt as a commercial venture.

A spokesman for Luk Hoi Tong confirmed redevelopment was to take place, but refused to disclose details.

The company is believed to be unable to proceed until the Entertainment Building is in use.

It is also believed that the Hing Wai building, on the corner of Queen's Road and D'Aguilar Street, is to be torn down.

The high prices in Central are speeding up change, according to Terence Chow, a director of Vigers.

More than $12,000 per sq ft has been achieved at Nine Queen's Road.

''The old buildings which have not realised their maximum potential are the ones people are looking at,'' he said.

''They are in prime Central locations.'' Space in Central is limited. The only new buildings due to open in the near future are the Entertainment Building and the Li Po Chun Chamber Building.

The Land Development Corp and Cheung Kong are also planning a joint venture to redevelop a site between Des Voeux Road and Queen's Road.