Blend of East meets West lures new breed

HONG KONG: Living in Sheung Wan for more than two decades, Karen Lee Ka-man witnessed its gradual gentrification from an old residential district into one of fashionable offices and eateries.

"I have seen the old housing blocks that were occupied mainly by locals being renovated and coffee shops and Western gourmet restaurants opening up all over the district. The character of the area has changed," she said.

Lee, who lived in the area for most of her 29 years, said the changes had not all been for the better. "It was a district with distinctive old architecture in which lived mainly local people. Now, it's more commercial, with more serviced apartments, boutique hotels and Western restaurants, which have attracted more expatriates and young people."

The price of this progress was that Sheung Wan had become more crowded, polluted and costly to live in, she said, so she and her retired parents decided to move to Tseung Kwan O three years ago.

The family sold their Sheung Wan flat at that time for about HK$4 million (RM1.56 million), which was nearly triple what they paid for it two decades earlier, Lee said. It was now valued at closer to HK$5 million.

Located between Sai Ying Pun and Central, Sheung Wan is close to the expensive residential area of Mid-Levels and is benefitting from its proximity to the upmarket area.

Redevelopment in the district has transformed many tenement buildings into boutique hotels and luxury flats, among which is the Hotel de EDGE by Rhombus on Connaught Road West, scheduled to open in the middle of this month.

"The renovations and redevelopment have boosted the quality and value of the flats there," Midland Realty Mid-Levels sales director Patrick Fung Kim-chiu said.

Fung said that before 1997, buyers showed only lukewarm interest in flats in the walk-up tenement buildings in the area and they were priced up to 40% lower than flats in buildings with a lift. Now they sold at similar prices.

"The upgrading of the area has attracted some quality residents, including expatriates, to move in," he said. "There is also demand from those whose flats have been sold to developers for redevelopment, as they like the neighbourhood."

Alan Lo Yeung-kit, co-founder and executive director of development company Blake's, said Sheung Wan had turned into the city's unofficial art and culture hub, which attracted his company to acquire a building at the west end of Hollywood Road and turn it into an upscale residential development.

The flats in the TwoTwoSix project sold for HK$14,759 to HK$18,359 per square foot at the end of last year, which was a record high for western Sheung Wan, he said.

Also attracted to the area by its blend of East meets West and old and modern was street artist Dom Chan, co-founder of two-member art crew Start From Zero, which opened its first store selling streetwear and exhibiting art in quiet Tai Ping Shan Street, Sheung Wan, in December.

"At first, we were thinking about premises in Central but the rent there was too expensive," Chan said. He could save about one-third on rent by choosing a spot in Sheung Wan instead.

He pays nearly HK$14,000 a month to rent the 400 sq ft Sheung Wan store.

He appreciated the variety of things the district offered, citing Hollywood Road as an example of the area's eclectic mix, with shops selling coffins, paintings and antiques.

Simon Lo Wing-fai, director of research and advisory at property agency Colliers International, said local retailers were facing greater competition for retail space because of rising inflation and aggressive rent increases.

"As a result, they are migrating to second-tier locations in key shopping districts from core shopping areas," he said.

Data from the firm shows average rents for ground-floor shops in core shopping areas such as Central, Causeway Bay, Mong Kok and Tsim Sha Tsui increased by 5.3% in the final quarter of last year.

Lo said the sharp increase in store rents was due to double-digit growth in retail sales and leasing demand from international brand names.

Given sustained economic growth and an anticipated increase in inbound visitors, he expects rents for ground-floor shops in traditional shopping districts to rise a further 20% over the next 12 months. — SCMP