Converted tenement flats offer value amid market downturn Luxury housing estates offer an array of extras ranging from clubhouses, pools, spas and terraced gardens to housekeeping services. But what they cannot offer is the appeal of low-density living that may be found in a converted Chinese walk-up building. Walk around SoHo or surf the Web and you will find scores of flats in Chinese walk-up buildings listed for sale. A 400 square foot studio flat in Staunton Street, for example, is listed at HK$2.3 million, while an 800 sq ft unit with a 150 sq ft terrace and a 600 sq ft rooftop in a 50-year-old building on Shelley Street is available at HK$9 million. There are also plenty of leasing options such as a 350 sq ft unit with a rooftop in New Street for HK$15,000 per month, or HK$45,000 for an 800 sq ft character flat in Bridges Street. The trend of investors buying flats in Chinese walk-up tenements around SoHo and renovating them began several years ago and the stylish units fitted with character furniture are now available for lease or sale. Initially, the investments focused mainly on old walk-ups in Staunton and Elgin streets, but investors had since looked further afield as opportunities were crowded out and were now moving west to Sheung Wan around Sai Street, Tung Street and Square Street, agents said. Not only individual investors are buying in the area, private property developer KF Development has been actively building up a portfolio and leasing the units as furnished flats under the Atria brand. Derek Lau, a general manager at Professional Properties, said sales and leasing of these old tenements fell about 90 per cent after the start of the financial meltdown in September. 'Expatriates account for almost 99 per cent of the tenants for the walk-up buildings in SoHo, and many were previously living in serviced apartments but move to these units to pursue a more stylish living place.' Since there are fewer expatriates coming to town because of the uncertain economy, leasing activities around SoHo had dropped significantly. Before the global financial crisis began to bite, said Mr Lau, a 300 sq ft furnished flat could be leased at more than HK$20,000 per month or a little over HK$60 per square foot, which is even more expensive than a luxury flat on the Peak. But rentals have now softened to HK$16,000 for a furnished 500 sq ft unit or HK$32 per square foot, with wide variations depending on fittings, size and location of the flats. 'Sales activities had slowed significantly in past two months, but since most of the owners are financially strong and purchased the units with little or no financing, they are under no pressure to dispose of their units in a hurry and therefore distressed listings have not yet been seen on the market,' Mr Lau said. Nonetheless, in some cases asking prices had softened from HK$8,000 to HK$10,000 per square foot to HK$6,000 to HK$10,000, he added.