Hong Kong builder says it draws the line at 200 square feet, even if demand swells for micro flats
The Hong Kong developer says its sales projects pipeline is dominated by larger-sized residential units
While micro flats are all the rage with Hong Kong developers chasing higher average selling prices, Chinachem Group is adamant in sticking to a no micro apartment investment strategy.
“We have no tiny flats of less than 200 sq ft in our portfolio,” said group chief executive officer Donald Choi.
“Providing a healthy living environment at reasonable prices is our focus,” said Choi, who joined Chinachem in January after 18 years at rival developer Nan Fung Development, where he last held the position of managing director.
With the market currently focused on building micro flats – units with saleable areas of below 200 sq ft – to cater for young single buyers, he said he would expect to see a short supply of mid-sized apartments in the coming years.
“Once these young buyers got married, they will see the need to upgrade to bigger flats. If the market shifted to build micro flats, it will help drive up prices for mid-sized flats, assuming that demand exceeded supply in future,” he said.
Chinachem, with 70 investment projects across residential, office, retail and hotel sectors, says its sales projects pipeline will be dominated by larger-sized units. Its flagship project includes a luxury residential development, The Lily, in Repulse Bay.
Choi said three-bedroom flats would account for about half of its 720-unit residential project in West Rail’s Long Ping Station, which is expected to be launched this year.
Across the city, tiny flats continue to be favoured by rival Hong Kong developers who remain upbeat about their market outlook.
Private developer Astro Far East last week kicked off the marketing of its micro flat development, The Astro, in Cheung Sha Wan. The development will comprise flats ranging from 173 to 338 sq ft in size, with a starting unit price of HK$3.33 million.
Another development City Hub in To Kwa Wan with units starting at 221 sq ft in size, is offered for sale this month. The 28-storey residential block is jointly developed by Chevalier Holdings, Golden Code Development and the Urban Renewal Authority.
At least 2,100 tiny flats are expected to be completed in Hong Kong between now and 2020, according to property consultant JLL.
The new supply of micro flats would total to about 510 units a year until 2020, up from the annual 151 units recorded between 2014 and 2016, it said.
The developer has also took part in a shared housing scheme, called Community Housing Movement, for the needy.
He said Chinachem would offer 16 flats, with floor areas of between 300 to 400 sq ft, in World Fair Court in Pok Fu Lam for lease at below market rates to needy families through the Hong Kong Council of Social Service.
The Community Housing Movement is an initiative floated by housing minister Frank Chan Fan after he stepped into office in July.
Chinachem will also team up with non-profit organisations to study the future use of the premises that once housed the Golden Valley cinema in Sau Mau Ping, Kwun Tong. The cinema was shut down in the 1990s as the operation sank into the red.