Sometimes it feels as if Hong Kong has more developers per capita than any other city in the world. Property development is simply a way of life here, for everyone at some level, and most of us know very little of what goes on in boardrooms. What we do know is that over 75 percent of flats sold in 2014 were provided by just five developers (Sun Hung Kai Properties, Cheung Kong, Henderson Land, Sino Land and New World) and for the most part a handful of major players “control” the market, ironic in a city that prides itself on its free market capitalism. But smaller, independent operators are starting to throw their weight around. K&K Property is one of the newest on the playground.
Like so many in property development now, K&K was born from a mixture of hospitality and fashion. With its root in Singapore, K&K Property was founded by former fashion industry professional Raymond Law who also managed a handful of luxury hotels, and which led to K&K. Following a master’s degree and stint at UBS, his son Kino Law wrestled with venturing out with a risky new idea when his father told him he was going to jettison the hotels. “I learned a lot in the banking industry but didn’t particularly enjoy being a banker,” begins Law, K&K’s director. “I saw a golden opportunity but struggled a bit when leaving my glamorous banking job. I was worried about my future. Then I remembered the speech Steve Jobs made at Stanford University, where he said you should follow your heart and find something that you are truly passionate about.”
So at 25 years old, Law helped his father sell the hotels, which turned out to be a lucrative decision. Among the properties sold were the Singapore Park Hotel Clarke Quay and Singapore Grand Park Orchard. When Chief Executive CY Leung increased land supply starting in 2013, Law elder and junior founded K&K in 2013 seeing Hong Kong as a smart investment. “In mid-2014, K&K Property bought its first flagship project in Kai Tak, amounting to [approximately] 520,000 square feet (GFA). Our Kai Tak project will deliver around 800 units and will be launched in 2016.”
Law sees K&K as a boutique developer, with an eye towards long-term impact and better, more user-friendly and intuitive design, with “no interest in creating soulless skyscrapers.” As Law sees it, his job as a residential developer transcends the usual role — enhancing the company’s market status, land bidding, sales and marketing and so on. It also involves responding to the needs of the market. “In recent years, small-scale units such as studio and one-bedroom units are very welcome by the market, so developers are inclined to supply more of this kind of residential unit in order to meet the robust demand,” says Law. “In general, the market will be able to absorb such kind of supply and the price will remain steady.” That’s good for K&K too.
As a boutique developer new to Hong Kong, K&K is starting small; slow and steady as it were. Its forthcoming projects include projects in Tuen Mun near Siu Hong Station, and at Kai Tak. “We will focus on residential land in the coming years, but will also explore commercial land plots, especially in the East Kowloon area, because in the long term we believe that the demand for office buildings in East Kowloon will be strong, in which the rental will move upward gradually,” Law says of K&K’s future.
The Bigger Picture
Not surprisingly, Law refuses to answer questions about who the job of providing housing for all Hongkongers falls to, about the distrusting public perception that the government is beholden to developers and is unwilling to legislate anything that would upset the balance, and won’t even hazard a guess as to what the SAR could look like a decade from now. Be that caution or reluctance to go on the record that is common among Hong Kong’s developers is anyone’s guess, but Law does have some positive comments for what the SAR is getting right. In addition to Leung’s land supply policies that allow smaller players a way into the real estate market and his pledge to make Hong Kong the tie that binds the region at ASEAN leadership forum earlier this year, “China’s ‘One Belt, One Road’ initiatives would benefit Hong Kong. As Mainland China strengthens its economic and trade connections with the Belt-Road countries, Hong Kong can provide Mainland enterprises with a wide range of professional services in the financial and legal areas. The One Belt, One Road initiatives will create huge opportunities for Hong Kong.”
Of course, there’s a downside too and Law agrees some things need to change — chief among them, unsurprisingly, is land supply. Law believes the Urban Renewal Authority has a mature apparatus that could accelerate regeneration given the chance, but, “To increase the land supply in long term, it is inevitable to explore rezoning in rural areas, with minimal environmental disruption,” theorises Law. Developing the parks is a powder keg at the very least, and for the most part popular only among those with land interests. And Law admits it’s a complex and touchy subject. “The rezoning plan has to be compatible with construction and development direction of peripheral areas, which is not an easy task. The government has to strike a balance between different stakeholders.”