Weekend Property

Centre of attention: Wan Chai’s transformation from seedy to fashionable is largely due to the work of pioneering developers

Gentrification over the last 10 years, driven in large part by the emergence of luxury residential developments, makes the district almost impossible to recognise as the “notorious” area of the past

PUBLISHED : Friday, 26 August, 2016, 11:07am
UPDATED : Friday, 26 August, 2016, 4:05pm

In the world of Suzie Wong, the “hood”, which was Wan Chai in the 1960s, was all fast men, loose women, and cheap booze.

The trilogy of book, film and play, that glamorised the Far East expat posting of the day, albeit fictitious, may have titillated global audiences, but earned the city a reputation which Hong Kong was keen to shake off.

Half a century on, the Wan Chai scene is very different. Instead of sleazy drinking dens, there are sophisticated wine bars. Old, cheap housing blocks have given way to high-class residential developments. The overall gentrification of the district ensures expatriates and locals are still drawn to Wan Chai – not so much to party, as to enjoy quality of life.

“When we talk about Wan Chai, we talk about one thing only: location. To the east there is Causeway Bay, and Admiralty and Central to the west, so Wan Chai is very convenient [for] people who work in those areas,” says Stan Kwok Tin-ming of Midland Realty. “We have all kinds of transportation to reach almost anywhere in Hong Kong and, in the past 10 years, many different international restaurants have opened in this area.”

Last year’s completion of luxury development The Avenue, and the revitalised Lee Tung Street precinct, have added to the district’s attractiveness, Kwok says.

According to Urosh Teodorovich, associate director at Landscope Christie’s International Real Estate, the transformation of Wan Chai from seedy to fashionable has been no different to that which has occurred in so-called “notorious” areas of other world cities, such as London and New York.

“We’ve seen an enormous amount of change, and it’s due in no small part to pioneering developers looking for bargains in the property market,” Teodorovich says. “Although it takes some time for this to gain traction, there is frequently a tipping point where others become involved. That drives prices up and quickly brings about a stark visual change to any given area.”

We’ve seen an enormous amount of change, and it’s due in no small part to pioneering developers looking for bargains in the property market
Urosh Teodorovich, associate director, Landscope Christie’s International Real Estate

For Wan Chai specifically, he credits Swire Properties’ development of Three Pacific Place as one of the biggest drivers of the district’s gentrification. “Its development led to things like Starstreet Precinct and so on growing up around it,” Teodorovich says. “If one of the old-guard companies like Swire goes in somewhere, it is only a matter of time before others follow suit.”

As, indeed, they did. The first major residential development was Star Crest (completed in 2000), followed by Convention Plaza Apartments, The Oakhill, J Residence, and the Avenue, one of the latest. While The Peak will always have its place at the top of Hong Kong’s most desirable places to live, many executives will choose Wan Chai now, Teodorovich says.

“They don’t have a need for the big houses [so in vogue] 30 or 40 years ago and, on top of that, people tend to want a shorter commute to the office. The convenience of being so near restaurants, bars and entertainment – all right there after work – creates a better lifestyle which people tend to be after.”

Lily Cheng, regional sales director at Centaline Property Agency, also credits the redevelopment under the Urban Renewal Authority for enhancing Wan Chai’s image over the past 10 years.

As newer apartments began to replace the housing blocks of old, a younger population followed. “Now, we have many different kinds of people living in Wan Chai,” Cheng says.

“Before, it was mainly old people and families. Now we’re seeing more young couples move here, as well as many expatriates working in Admiralty or Causeway Bay, who are moving from Mid-Levels and the eastern part of Hong Kong to Wan Chai. Some buy for their own use, some rent, because it’s more convenient.”

The school network is another drawcard for permanent residents. “Some parents move to Wan Chai in order to get into the network,” Cheng says. “If they can enrol their children in a good primary school in Wan Chai, they have more chance to get into the better secondary schools, such as St Paul’s, St Joseph’s and Wah Yan College.”

Investors also see the opportunity, Cheng says, because the smaller flat size and attractiveness of the locale means that the newer Wan Chai flats are easily rentable. The housing mix is mainly small and medium-size units (from studio to two bedroom) – only 30 per cent are three-bedroom. According to Cheng, the average net area price for a newer building, below 10 years, is from HK$18,000 to HK$25,000 per sq ft. In older buildings (40 years plus) the average price is HK$12,000 to HK$18,000 per sq ft.

Demand is strong, both for sales and rentals, the agents say, but in terms of upcoming new supply, the pickings seem slim– although at least one developer, Sun Hung Kai Properties, has land banked a site on Stubbs Road, Wan Chai, with plans for residential development.