Hong Kong’s boutique developers are changing the residential cityscape
I f there is one thing Hong Kong’s residential market has no shortage of it’s variety. Though budget is increasingly becoming a concern, the type of flats available to those looking to rent homes is a deepening field, particularly for temporary residents. There are the familiar towering serviced apartments that dot Tsim Sha Tsui and Mid-Levels, and pepper the southern coast in Repulse Bay: the Gateways, Pacific Place Apartments and Lilys of the industry. The last few years has seen the rise of the small scale boutique provider for the more adventurous arriving resident, providers that focus on character and atmosphere — the CHIs and Ovolos.
But there are a few new developer players on the scene, ones that fall somewhere in the middle. A prime example is local designer Helen Lindman. Lindman started with a series of single flats before moving into small walkup redevelopments like 55 Tung Street and next year’s 11 Upper Station Street. Also notable is Blake’s, best known for the just completed 226 Hollywood Road (which was sold on a per unit basis instead of rented out).
Darton Group’s Kaza has just launched its second serviced apartment in a quiet corner of Wanchai. But they’re just a trio of examples in a growing trend toward airy, elegant, efficient and chic homes in low- and mediumrise older buildings that stress character over capacity.
Another of these boutique developers is Raoul Preller’s Loftliving. Founded just around two years ago and up and running at full tilt a year after that, Loftliving was the result of a perfect storm of timing, locations, aesthetic vision and personal ambition. “To use the cliche, I love property. My first two personal properties were a good start. When I set up the business two years ago it was clear then that commercially there was an upside,” Preller explains. Positive feedback on his earliest units in hip areas — that at one time were off the grid — in Sai Ying Pun, SoHo and Kennedy Town led him to believe he had a product that there was a clear niche for and the months after 2008 made financing feasible. And so a developer was born.
In the wake of the success of the single units, principal/managing director Preller is readying to launch Loftliving’s first whole building development in 2012. The newest addition to the portfolio is what Preller calls “the hottest property I’ve ever seen in Hong Kong.” Aberdeen, another district that works for those in it for the long haul, will mark Loftliving’s first foray into island south, and is a waterfront property with green views as well, in a low-rise precinct. “It’s a remarkable space. Seriously.” Preller isn’t being cagey. Work is well underway, but until the official launch the details have to remain under wraps. The MTR extension, the conversions at Wong Chuk Hang and the residential feeder at Ap Lei Chau are among the factors that led Preller to jump at the chance to do his first building. As Preller puts it, “I think that area is going to be a real hotspot. It’s on the radar now.”
For boutique developers there is an element of luck involved: Preller credits the stars aligning right in his Aberdeen purchase. Finding an old walk-up where all the floors are available is rare, but the new breed is often willing to wait it out and buy each strata title as they become available. The buildings are also appealing because of the economy of scale; entire buildings simply make more financial sense. Complete control of the land a structure is on is an added bonus. And for mid-range investors, price points for purchasing the buildings are manageable. The boutique players like Preller fall into that zone between properties that are too small for the major institutional players (generally three to six units) but too big for individuals working from private investment standpoint.
To be clear, Preller is not a serviced apartment provider in the complete sense of the word: Loftliving units are fully furnished and equipped, but it’s up to residents to change their own bed sheets, launder their towels and subscribe to cable. Leases are standard one year plus one and are targeted at residents looking for something a little different. “We provide a lifestyle choice for discerning tenants who value unusual living space and the aesthetics of that living space. There’s so much cookie-cutter stuff in Hong Kong and some people want creative, funky spaces. That’s where we come in. That’s our reason for being.” Like a true serviced apartment, tenants can arrive at a Loftliving flat with a suitcase and be “home,” but unlike serviced suites, they’ll be more invested in the property and the area. “The key difference comes down to having a sense of it being [one’s] own home. A serviced apartment always feels like a hotel. It’s never really yours. My product is more personal.”
While Loftliving doesn’t have any true lofts yet, regardless of the properties’ decidedly lofty vibe, Preller admits to having designs on rezoning one of those industrial buildings in Aberdeen and creating the real deal. “I would love to do that,” he drawls, a delicate gleam in the eyes when he says it. “Single units, small buildings then the industrial buildings: these are the steps. It hasn’t been long and property is a long ‘game’. You don’t bite off more than you can chew, and you gain credibility, knowledge, experience.” He pauses. Grins. “It will be done.”