Glorious Sun rises on Tsim Sha Tsui's One Peking

PUBLISHED : Wednesday, 25 June, 2003, 12:00am
UPDATED : Wednesday, 25 June, 2003, 12:00am

Charles Yeung Chun-kam knows he paid too much for his Tsim Sha Tsui flagship property - One Peking - but he has no regrets.


When his company, Glorious Sun Group, bought the 23,680 square-foot commercial site for HK$1.24 billion at a government auction in April 1998, it was not, by prices of the day, considered out of the ordinary.


Mr Yeung, a medium-size private developer, fended off rival bids from Dickson Concepts (International), HKR International and a consortium formed by Great Eagle Holdings to take the site.


Glorious Sun spent another billion dollars to build a 30-storey office commercial building, completed this year, at No 1 Peking Road.


Mr Yeung conceded that by today's standard it was an expensive purchase, given the 65 per cent slump in property prices in the five years since the purchase.


'I have no regrets. This is my flagship property and I am confident that it will become a landmark in the Tsim Sha Tsui tourist belt,' he said.


The outgoing and optimistic garment manufacturer-cum-developer has his own view of the acquisition.


He thinks putting HK$2 billion into this project is better than putting it in the bank.


'I can generate a 6 per cent annual yield from leasing One Peking, but if I put the same amount in a bank, I would only receive interest rate of less than 1 per cent a year today,' he said.


He believes the building will become a hot spot for locals and tourists to Hong Kong as the ground floor offers high-class shopping with some renowned luxury retail shops in residence and the top three floors offering an array of restaurants - Japanese, Italian, Shanghainese.


Mr Yeung was delighted that his tenants did not ask for rent reductions when the atypical pneumonia outbreak kept shoppers away.


'It demonstrates their commitment and confidence in Hong Kong's tourism industry,' he said.


The slide in land prices has not dampened Mr Yeung's enthusiasm for property development.


It is his ambition to build a hotel in Kowloon Bay.


He has in mind a three-star hotel, with 960 rooms and a total floor area of 800,000 square feet. The cost is estimated at HK$1.1 billion.


He is optimistic about the hospitality industry and is keen to tap an expected growth in demand from affluent mainland travellers travelling abroad.


'We are going to be more active in exploring development opportunities for two- and three-star hotels in anticipation of an upcoming tourism revival,' he said. 'There is a short supply of hotels targeting the lower to medium market, and demand will outstrip supply in the next five to seven years.'


The group won Planning Department approval in February to develop a hotel on the Kowloon Bay site.


Mr Yeung sees his three-star hotel project helping the community by creating jobs.


'An office building is just for leasing while a hotel gives people jobs,' said Mr Yeung, who expects the hotel will be completed in about two to three years.


He said it would take about 1,000 staff to operate the hotel.


'If there were 30 similar hotels on the drawing board, they would provide 30,000 job opportunities,' he said.


Mr Yeung thinks the government has a part to play in helping developers turn dreams to reality. He urged the government to offer incentives on land premiums to encourage hotel development in a bid to ease unemployment.


In contrast to his hotel-sector interest, Mr Yeung has no plans to enter the residential market.


'We still do not know where the residential market is heading,' he said.


He said there were no plans to inject his privately own property projects into the listed company, Glorious Sun, which is mainly involved in garment manufacturing.