The Long Hello
Chinachem finally launches the latest in luxury urban living, The Lily
| Text : Elizabeth Kerr | Photo : courtesy Chinachem Group |
You know the building: the silo-shaped (actually lily-shaped), glass and steel oddity that seems to have loomed over Repulse Bay forever, eerily silent. Still. Derelict. The now nearly iconic Norman Foster-designed building at 129 Repulse Bay Road was Foster’s first residential project in Hong Kong, and has quite a colourful history. Built over a decade ago, the development sat vacant in the wake of the 1997 financial crash. After years of hemming and hawing, The Lily finally announced it was leasing two- and three-bedroom flats in late-April. It is now Chinachem’s flagship residence.
Despite industry analysts guesstimating units in The Lily could sell for upwards of $70,000 per square foot, sales were never an option. “The building was always important to Nina Wang,” explains Jones Lang LaSallesAnneMarieSage,headofresidential leasing and relocation services (JLL is also managing the building). It holds sentimental value for the family, and “Chinachem had no intention of selling; it was bought as a long-term investment,” she states, going on to mention the added element of re-branding involved. “One of the things, with this building, that Chinachem really wanted to do was to re-launch the brand in terms of being synonymous with luxury.”
The process of taking The Lily from urban legend to luxury standard-bearer began two years ago when Chinachem approached JLL to collaborate on readying the building for occupancy. Back then, “It was an empty shell. They [had] decided they wanted to lease and they came to us to look for advice on what sort of apartments, what was needed in the [residential]marketandweworkedwiththemconfiguring it as it is today,” Sage explains.
The result is 100 sprawling homes in one of Hong Kong’s most coveted residential areas. The Lily sits right on top of Repulse Bay Beach. Three-bedroom serviced apartment units clock in between 1,800 and 3,600 square feet; unfurnished three-bedroom duplexes are 3,700 square feet and four-bedroom suites are also 3,600 square feet. All the units are outfitted with state-of-the-art electronics and communications and have full-on high-end kitchens. The Lily’s trump card is that every unit faces the South China Sea. But all this luxury comes at a premium: Average asking prices hover just around $60 per square foot, with the high water mark so far coming in at just under $80. In case you failed maths, for the largest unit that’s just about $225,000 per month.
At those prices The Lily has to distinguish itself in ways other than just having a view when a million other properties boast “the ultimate in luxury urban living”. Or does it? “The thing is, there aren’t a million other developments popping up for lease. If you look at the amount of stock that has come onto the market in the past 10 years or is likely to come on the market in the next 10 years that’s comparable to this type of building — for lease — there’s nothing,” Sage points out. She cites The Summit and Highcliff as two examples, and Sung Hung Kai’s 127 Repulse Bay Road next door as a mere handful of peers. Sage continues: “There is a distinct shortage of large serviced apartments, though we’ve seen quite a few boutique apartments coming up. If you look at the majority of serviced apartments they’re 90 or 100 percent full. There is a limited supply of large serviced apartments, and when you look at the south side, even less.”
This demand is coming from an increased and consistently high number of expatriate labour — The Lily’s primary market — coming to town, that shows no signs of abating any time soon, particularly in light of rebounding global economies. “It just shows you the demand. We’ve seen 33 percent more new families coming into Hong Kong in the first six months of this year than we did last year and in 2008.”
Following a soft launch in May, leasing has been continuing throughout the traditionally slow summer season. As it stands, about 50 percent of the building’s overall units are already leased, and the unfurnished units are almost completely spoken for. “I would definitely be quite comfortable to say the building will be fully let in another couple of months,” Sage declares.
That’s all well and good, but can the serviced apartment industry rely on a continued influx of temporary residents? The serviced flats arena is experiencing something of a boom these days, and it’s precisely because of the fluid nature of Hong Kong’s labour force. Sage admits that it’s also part of the reason Chinachem opted to carve out some of The Lily’s units for just that market sector. But the constant threat of more fiscally responsible (Kuala Lumpur, Shanghai) or cleaner (Singapore) cities for multinationals to operate tamping the market looms. Sage pooh-poohs the notion almost as quickly as it’s brought up. “I’ve been here 22 years and I’ve been hearing that for the last 10 years … In terms of infrastructure, for families, Hong Kong is still very much a hub for people to be in and for the financial industries, and that’s where we’ve see a lot of growth,” she argues. “Obviously Hong Kong turns around on a sixpence, so you can never tell. But Chinachem has been leasing properties here for many, many years and they’ll ride the ups and the downs.”
There are still a few special units left to launch, which are likely going to be announced later in the year. For now, Chinachem can feel vindicated for snapping up a piece of land way back when $20,000 seemed outrageous. The Lily’s leasing rates should go a long way to that vindication as well — now and down the road. “We’re expecting rents to continue to appreciate. We’ve seen just under an 11 percent increase in the luxury market. We feel fairly comfortable that rents are going to increase another 10 percent before the year-end. We’ll see an overall increase this year of 20 percent,” Sage predicts. And regardless of prices or occupancy rates, The Lily is likely to stay a topic of discussion for some time to come, a kind of currency that simply can’t be bought. Because ultimately, Sage succinctly puts it, “Love it or hate, people have always talked about it.”
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