Neighbourhoods will be the keys to successful property development in the coming years.
How does Hong Kong measure up?
The old real estate adage holds that the key to good investment is location, location, location. That’s true under most circumstances: in London, King’s Cross and Mayfair rank considerably higher in value than Ealing and Ilford. Paris’s 4th and 16th arrondissements are more desirable than the 19th and 20th. Here at home, Repulse Bay and The Peak sit near the top of the prestige list.
One of the buzziest trends in property in recent years has been the idea of street life — of neighbourhoods. As the world urbanises and millennials enter the work force, the commercial and residential demands of both tenants and buyers have stretched beyond basic amenities and services. Districts with a true neighbourhood feel are the preferred location for work and home. It goes a long way to explaining the rise in popularity of locations such as Sai Kung, Tai Hang and Sai Ying Pun for residents, and cool Wong Chuk Hang and bustling Causeway Bay for co-working operators. And developers are finally starting to take notice.
Block to Block
Late in 2016 Westminster Terrace developer Grosvenor Asia Pacific commissioned research (with HKU) into Hong Kong’s neighbourhoods — where they are, what defines them and how Hongkongers feel about them. The instinctual reaction is to declare that Hong Kong has no neighbourhoods; that the city is structurally and politically unable to have neighbourhoods. Grosvenor Asia Pacific Chief Executive Benjamin Cha agrees — at least on the surface. “I think one of the most interesting things that I found through [The Neighbourhood Series: Hong Kong] and analysis was how do you frame this discussion? We all talk about neighbourhoods and live in neighbourhoods, but as the study shows, actually defining neighbourhoods is not an easy exercise.”
Grosvenor and HKU managed to identify 500 to 600 distinct neighbourhoods — anything from villages to housing estates — within the SAR. “This diversity of neighbourhood is a significant characteristic of Hong Kong as a city,” explains Grosvenor Head of Research, Tim Jowett. The goal behind the research was to understand property holistically, starting at street level, and embracing the idea of living cities. For Cha, property now transcends location. Development means beginning with context. “Looking at a building without any appreciation or sensitivity as to where that building sits, what street it sits on, how the community that uses that street on a day-to-day basis differs from another building on another street in a different neighbourhood is very much a part of those old sayings. We’ve been sensitive to this for a long period of time.”
Six hundred distinct neighbourhoods is an unwieldy number that Grosvenor managed to distil to seven broad categories: heartland (high density post-war locations), historic (pre-war, low density spots), prestige (affluent and green), ambient (low convenience but green), transitional (regenerating), networked (modern, convenient and urban) and vibrant (similar to transitional, with more leisure). Roughly 60% of the study’s respondents expressed satisfaction with their quality of life, and despite Hong Kong’s steel and concrete image, 20% of the neighbourhoods rated as ambient. The one factor that stood out was a demand for better buildings. “Hong Kong’s neighbourhoods are supplying what Hong Kong people are looking for,” adds Jowett, referring to nearly comprehensive levels of transport connectivity and amenities. However, “They want a high quality built environment, and this is not something [residents] are seeing right now.”
The Future of the Neighbourhood
It’s not all bad news though. Developers are responding (New World Development and Swire Properties are actively working their future projects into the cityscape better) and Cha thinks, “There are things to be excited about, and I would submit we’re trying to be the good guys. And we’re not unique in that regard. There are property developers trying to make better product and be mindful of the public realm — where the private sector meets the sidewalk, meets the street, meets the broader context.”
But what does all this mean for urban living in Hong Kong? Cha is adamant that Grosvenor is not trying to make policy, but would be willing to enter into a dialogue with government or offer suggestions — and more research: Grosvenor is planning on similar studies on Tokyo and Shanghai (the full Hong Kong white paper can be downloaded at www.grosvenor.com/featured-locations-and-properties/city/living-hong-kong).
Indeed, Grosvenor isn’t alone. Also last year, architects Hassell collaborated with Brickfields Consulting to release its Place Report, which identified the 10 most prominent trends currently influencing commercial and residential property development. Among the key drivers: the walk economy, repurposing underutilised spaces, so-called playscapes enhancing creativity and wellbeing, and prefab, customisable, fast residential construction. All are elements of the traditional neighbourhood. As Hassell’s Angus Bruce, head of landscape architecture, argues, any architect can deliver gross floor area, but going forward that’s not enough, and it is “The difference between a design that’s achieving some degree of excellence and convincing whoever the client might be that 400 flats is one thing, but the quality of the context you’re putting the flats into, the location, sets its value. If you can improve the location, you improve the value. Good public realm adds value.”
Of course, Grosvenor has a vested interest in responding to residential demands, and therefore cultivating future owners and occupiers, but Cha sees that as win-win. “If it’s mercenary, so what? I would go so far as to say property companies who are not mindful of neighbourhoods and who still think, in this day and age, of building in isolation probably won’t be around in 10 years,” he finishes. “Whether you’re an office tenant, a homebuyer, a tenant or a retailer, anyone living and working in a city today, there’s a need and demand for living cities.”
Click here to know more about HK neighborhood