New heights of luxury
It's not often Hong Kong gets an entirely new neighbourhood. But that's what happened at the Kowloon Station project in West Kowloon after the airport was relocated from Kai Tak to Chek Lap Kok. The need for new transport connections encouraged large-scale reclamation and the construction of a new part of town above stations and roads.
Kowloon Station properties, comprising high-rise buildings from a handful of developers, have given new meaning to what a 'luxury neighbourhood' stands for in Hong Kong. 'It is unlike many traditional luxury areas such as The Peak and Island South,' says Buggle Lau, chief analyst at Midland Realty. 'Most people choose West Kowloon because of convenience and it is popular with mainlanders.'
With public consultation on the three plans for the West Kowloon Cultural District closing this month, the area is the centre of attention.
Though the arts district has been dogged by controversy, it will add to the entertainment and recreation options in the area. Advocates point to West Kowloon's easy connections to the airport, the mainland and Hong Kong Island.
About 30 per cent of sales at The Cullinan, a Kowloon Station project by Sun Hung Kai Properties, have gone to buyers from outside Hong Kong, mainly from across the border.
'While marketing the project, we have seen a significant demand from mainland buyers,' says Victor Lui, executive director of Sun Hung Kai Real Estate Agency. 'They are successful businessmen on the mainland and frequent travellers to Hong Kong.'
The area will eventually benefit from the station for the express rail line to Guangdong and, coupled with the strong brand name of the developers at Union Square, the connections are major selling points for mainland buyers.
The Sorrento by Wharf has seen the most activity this year, with an average of 19 flats changing hands per month, with 173 sales in the first nine months of the year.
At the other end of the scale, The Cullinan has seen relatively few transactions, with only 70 apartments changing hands up to September. But they command the highest prices, at an average of HK$18,768 per square foot so far this year and, with prices rising 25 per cent this year, reached HK$20,898 as of September.
'The sales of The Cullinan last year were overwhelming,' Lui says. 'Although we marketed the project just after the financial tsunami, we have sold over 500 units already, fetching a total revenue of HK$10 billion.'
But there are critics of the way West Kowloon has been put together. Though the apartments have fetched high prices, they create a concrete wall that gives residents great views but blocks the scene from behind West Kowloon.
'The whole area is basically high capacity roads and footbridges, and very large parcels of land sold to developers. This is a very different urban fabric from what you have next to it, where you have very small lots, diverse ownership and small streets where you can cross everything at street level,' says Paul Zimmerman, CEO of Designing Hong Kong.
However, Lui says the proof is in the transactions. 'Our sales prove that the whole area is very attractive and very appealing to high-end purchasers,' he says. 'You can't compare such a high-class area with Cheung Sha Wan, Sham Shui Po or Mong Kok.'
West Kowloon has a very different feel from other luxury neighbourhoods, such as Kowloon Tong or Mid-Levels. In a development managed by a handful of companies, there's not the same opportunity for small shops and businesses. Since West Kowloon grew after the removal of height restrictions for Kai Tak airport, there are only big towers and no smaller structures to break up the landscape.
Many insiders believe the future remains promising. 'There's still a lot of undeveloped spaces in West Kowloon,' says John Au-yeung, a broker with Fidelity Realty. 'It is a completely new development, so the neighbourhood will be clean and well-managed, with less crime.'
West Kowloon has other important areas, and properties around Olympic Station are popular with people who appreciate the benefits of being just one MTR stop away from Kowloon Station, but with lower prices. New projects such as The Hermitage by Sino Land, with its emphasis on a luxurious clubhouse, have been very popular.
