As more and more people are choosing to live right where they work, transactions are up, along with property prices in Island East. Jane Drew talks to Xavier Wong director and head of research for Knight Frank
It’s odd to think that Quarry Bay was one of Hong Kong’s first mixed-use residential cum commercial areas. After the arrival of the colonial Brits, it provided a place both to work and live for Hakka stonemasons, who settled there to quarry the hillside. Today of course, the district plays host to a very different breed of worker: the white-collar type with offices in Taikoo Place, Manulife Century Plaza and, as of April 1 this year, One Island East.
Locals and expats are drawn to Quarry Bay for much the same reasons as blue chip tenants: they are lured by the lower rentals and larger floor space available. What is developing is an ultra-modern alternative to the Central Business District, a forerunner of West Kowloon, if you will, where residents can live in close proximity to their place of work.
While residential space is both available and affordable, the infrastructure is also favourable with covered walkways and areas of street-side retailing and sensitive landscaping. And importantly, those who don’t work in the immediate vicinity are well served by public transport including two MTR stations: Quarry Bay Station for the Tseung Kwan O line and Island line, and Tai Koo Station for the Island line.
One of the most attractive out-of-Central business addresses in the territory, Quarry Bay is also simply a popular place to live. It appeals to families as it is laced with parks: Quarry Bay Park, Greig Road Sitting-out Area, the Tai Tam Country Park Quarry Bay Extension and Quarry Bay Municipal Services Building, which boasts an indoor playground and a public library. What’s more, it has a good catchement area taking in a score of top primary schools, plus Canossa College and Delia School of Canada for older kids.
“Quarry Bay housing is almost back to its peak 1997 value,” says Xavier Wong director and head of research for Knight Frank. “Prices have risen 60 percent since 2005 to an average of HK$6,900 per square foot in June this year. Residential prices in Quarry Bay increased by about 25 percent in the first quarter of the year, and then eased by about 5 percent in the second quarter. Though the market consolidation is likely to continue in the coming months, prices in Quarry Bay should be resilient.
“Residential rentals in this area are now 44 percent higher compared with early 2005.”
If demand is on the up for properties in Quarry Bay then Tai Koo Shing, which offers up 24-hour security, a swimming pool and children’s playground is the star performer. “It’s currently the most sought-after large-scale residence on Hong Kong Island,” says Wong. “It’s been experiencing a surge of transaction volume this year, hitting the highest level since the second half of 1997, and availability is scarce.”
An 850-square-foot three-bed apartment on a high floor is currently on the market for HK$7.5 million. For a 779-square-foot two-bed unit on a low floor you are looking at paying HK$7.65 million.
At Kornhill, another popular Quarry Bay housing development, prices are also on the up, but Wong notes that, “the average transaction volume is half that of Tai Koo Shing, since the later is right on top of City Plaza”.
Here a 1,064-square-foot three-bed duplex is on the market for HK$9.68 million; for a 2,000-square-foot four-bed unit you are looking at paying HK$17 million. Since Kornhill is situated on the hillside, whether flats are in the upper, mid or lower blocks makes a big difference to the price. An 850-square-foot three-bed unit in one of the upper blocks is going for HK$6.5 million; whereas for an apartment of the same size in a middle block you are looking at paying HK$5.3 million.
Rental-wise Kornhill covers the spectrum – singles can currently rent a 583-square-foot two-bed apartment for HK$14,000 per month. For a three-bed of just over 1,000-square-foot, you are looking at paying between HK$32,000 and HK45,000 per month depending on the block. A 2,000-square-foot four-bed unit rents for around HK$65,000 per month, which is still a steal compared to Mid-Levels prices and a good option for a flat share.
It’s interesting to note that Swire Properties has a large asset portfolio in Quarry Bay, and thus many places and facilities take its Chinese name, Tai Koo. In the mid-1980s, the hillside was converted into Kornhill apartment buildings, the Tai Koo Reservoir into Mount Parker Lodge, the Tai Koo Dockyard into Tai Koo Shing, and the Swire Coca-cola factory into Kornville.
It was in 1987 that Island East really came into its own as a commercial hub, when the Tai Koo Sugar Factory gave way to Cityplaza, the largest shopping destination on Hong Kong Island.
The mall comprises some 1.1 million square feet of retail space and entertainment facilities. In addition there are three office towers in the development, covering a total of 1.6 million square feet of space, adjoining 331,000 square feet of neighbourhood shops and 5,000 car parking spaces. At adjoining Tai Koo Place, Swire Properties owns 4.4 million square feet of Grade A offices and three techno-centre buildings.
Seventy-storey One Island East, located on the TaiKoo Place/Cityplaza axis, is giving the already mature office district a genuine boost. It provides a further 1.5 million square feet of Grade A office space, which has been taken up by over 300 multinational corporations, including key new arrivals from the finance sector including DBS Bank, Morgan Stanley and JPMorgan.
“With more and more people now working in Quarry Bay, and a lack of new supply of large-scale residential projects coming up in area, we can expect prices to keep on rising over the longer term,” says Wong.
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