MAGAZINE 51 MARKET WATCH

 

 

Tai Tam translates from the Chinese for “big pool” and it’s certainly where you’ll find many of Hong Kong’s big fish. Rachel Ainsley talks to Herrick Lee of CSI Property Holdings Ltd

Nestled between Stanley Peninsula, D’Aguilar Peak and Tai Tam Tuk, Tai Tam Bay has to be one of the most picturesque parts of Hong Kong, and not surprisingly the homes lining Tai Tam Road are among the most prestigious. Chanteuse Fay Wong owns a home here, and the CEO of McDonald’s (Hong Kong) is said to lease his villa for around HK$300,000 a month.

Tycoons flock to Tai Tam because it is a protected little enclave: arguably the most exclusive on the South-Side. Most buildings are limited to three storeys (no high rises here) and five-star facilities are a given. Those in the know appreciate that the villas on the coastal side of Tai Tam Road boast even numbers, and apartments on the other side odd numbers.

Here of course you pay for the sea view, and the square footage. In terms of living space, Tai Tam beats its South-Side neighbours hands down since most of the villas come in at over 5,000 square feet. What’s more all the standalones (and most of the apartments) on Tai Tam Road enjoy spectacular sea views, something that cannot be guaranteed elsewhere. Added to this residents enjoy easy access to the Tai Tam Reservoirs and Tai Tam Country Park.

“The first thing you have to understand about Tai Tam is that it’s exclusive,” says Herrick Lee deputy head of the Group Property Division at CSI Property Holdings Ltd. “It’s as noble an area as Shouson Hill but with better views and it’s in a distinguished neighbourhood. Houses are cheaper in Chung Hom Kok because most of the sea views are blocked by Stanley but also because of the public housing estate nearby. Even Stanley isn’t so high class because of all the retail and weekend crowds.”

Understandably, despite their high price tags, Tai Tam villas sell like hot cakes. The fact that they seldom come on the market only fuels the speed of transactions.

“Villas sell on average for between HK$30,000 per square foot and HK$40,000 per square foot, and prices have risen by at least 20 percent since September 2007,” says Lee.

At No. 12–16 Tai Tam Road, two standalone homes are currently available for exclusive viewing. The six-house development was built as a National Electronics Holdings Ltd trophy project, and it’s on a par with the firm’s high-class developments at No. 37 Deep Water Bay Road and No. 56 Peak Road. In late 2007, one of the houses sold for around HK$150 million.

“No. 12–16 Tai Tam Road has been newly renovated, and designed by premier local interior architect Steve Leung,” reveals Lee. “The villas measure in at around 5,200 square feet, excluding private gardens, pool and garage, and each comes equipped with its own wine cellar.”

Later this year, four villas are expected to come on stream at No. 8 Tai Tam Road. Once renovated, these homes could sell for at least HK$200 million each. Here, the layout is such that you enter on the top floor: a welcome change from the classic arrangement, where you enter on the ground floor and walk up to the master bedroom.

For those looking to buy an apartment on Tai Tam Road, prices range fairly widely. Units in high-end developments, like Bluewater, sell for more than HK$30,000 per square foot; at the lower end, flats come in at HK$17,000 per square foot. Most blocks are at least 15 years old with units covering over 2,500 square feet but in a few developments, like Pacific View, which has good facilities and is right next to the American Club, 1,700-square-foot flats are available.

“As with the villas, prices for apartments have been rising steadily over the past 12 months and this looks set to continue,” says Lee. “Consider that in January 2008, a 1,906 square-foot unit on the 32nd floor of Pacific View sold for HK$24.7 million; in February 2007 a flat of the same size on the 34th floor went for HK$18.4 million. This represents a growth rate of 34 percent.”

The value of apartment projects in the area is also rising steadily. In the third quarter of 2007, the 12,000 square-foot site at No. 21 Tai Tam Road sold for HK$168 million. In March this year, a site of a similar size sold for HK$230 million at No. 9 Tai Tam Road.

Demand for Tai Tam property seriously outstrips supply, and those who get their hands on a villa or apartment typically keep it for their personal use. However there are rental opportunities in the area for those willing to pay through the nose.

“Rentals are going up as of this year, as they are following the sales increases,” says Lee. “The cost of a lease depends on the size of the unit, the view and the standard of renovations but you are unlikely to see anything offered for less than HK$50,000 a month.”

At The Manhattan, where there are currently no vacancies, a 1,772-square-foot unit would likely rent for HK$53,000 per month. For a 2,837-square-foot unit, meanwhile, you would be looking at around HK$80,000 per month. At the rather more salubrious Belgravia Height, for a 2,877 square-foot unit, you’d likely pay around HK$120,000 per month.

Villa rentals vary just as widely but few landlords will lease for less than HK$150,000 per month. To give an idea of prices, the asking rental for a 2,600-square-foot villa at No. 46 Tai Tam Road is currently HK$120,000 per month; while HK$190,000 will get you 4,372 square feet at Le Palaise. A 3,960 square-foot unit at Villa Rosa with no view is renting for HK$220,000 per month, while HK$250,000 per month will get you 3,980 square feet at Rosecliffe.

With rental opportunities so scarce, one site to watch is No. 21 Tai Tam Road, where a seven-storey apartment block is in the pipeline. The land was bought six months ago by a mainland Chinese company. Plans for development have been submitted, and while the property is likely to be kept for self-use, it may be that some of the apartments will eventually be rented out.