Is Causeway Bay´s Residential Property Worth Buying?Love it or hate it, Causeway Bay is one of the city´s most compelling districts for a host of reasons. One of the few areas that are equal (or almost equal) parts retail (Times Square, Russell Street, the new Hysan Place), offices (Times Square again, the towers near Lee Theatre), residential (nearby Happy Valley, the new yoo) and leisure (Victoria Park, the dining enclave of Tai Hang). It could be in the midst of something of a transition if Hong Kong´s retail sector continues to flounder, but for now, it´s the one place in the SAR where you can find anything. Sorry, Mongkok.

Shopping Woes

Causeway Bay holds the distinction of being located, for all intents and purposes, in both Wanchai and Eastern Districts. In one of the city´s most densely packed neighbourhoods, CWB boasts high end and mass market shopping, cheap, cheerful and local as well as trendy international dining, the Central Library, one of Hong Kong´s great public spaces in Victoria Park (it has grass) and the Royal Hong Kong Yacht Club. Between them Eastern District and Wanchai have hundreds of primary and secondary schools, including Queen´s College (Stanley Ho and Sun Yat-sen are both grads), St Paul´s and Delia. To say Causeway Bay is well connected to other parts of the city is an understatement: the MTR station is larger than some airports and the buses, minibuses and tram are just added bonuses.

But the bulk of Causeway Bay´s success comes on the back of its retailing, which stands as one of the Big Three retailing hubs in Hong Kong (with TST and Central) and is the priciest retail property in the world. Or it was. Property consultancies Knight Frank, Colliers, CBRE and Jones Lang LaSalle agree that as China´s high profile anti-corruption campaign wears on, retail revenues will only continue to drop (as high as 27 percent in 2014, before the protests started), which is the force behind the first rental rate dip in nearly a decade. In a district where landlords sit patiently waiting on — or expecting — redevelopment, they could be waiting much longer if Mainland shopping habits don´t change soon. Reuters quoted CBRE´s Sebastian Skiff, executive director of Asia retail services, in July as stating, “I probably do see New York regaining the No.1 spot in the not too distant future — within 2014 or into 2015.” The days of a 130-square foot shop fetching $180 million (an oddity from March 2014) could be a thing of the past.

Temp Lodging

As many flats dot the Causeway Bay area, like the ones perched on top of the Fashion Walk stores and tucked along the smaller streets running off Kai Chiu Road and Jardine´s Bazaar, there are nearly as many temporary accommodations and Causeway Bay is a prime location for serviced apartments. Local without being too far off the beaten path but a considerable price distance from Mid-Levels and Repulse Bay, CWB has become a viable option for long-term visitors. V Serviced Apartments, Como Como, Apartment O, Studio Studio and Shambhala are just a few of the dozens now operating in the district. That number balloons when D´Home, The Harmonium, Queen´s Cube, Garden East, The Johnston Suites, and Butterfly on the Wanchai side are factored in.

It comes as no surprise that rents and prices in Causeway Bay can fluctuate wildly, between $10,000 per month in serviced suites and old walk-ups to $75,000 in Park Haven, and between $4 and $40 million (also at Park Haven). Causeway Bay has its share of upmarket addresses, Park Haven being one, Victoria Park Mansion and the forthcoming yoo Residence, which is average $12 to $18 million (except for the top floor suites) among the others. And despite protesters who have parked themselves in front of Sogo, successful sales launches seem to be forging ahead. New World Development´s Pavilia Hill (on Tin Hau Temple Road, on the far side of Victoria Park and technically in North Point) nearly sold out during its October launch ($18 up to $54 million), though many local real estate agents (speaking anonymously) estimated the protests are forcing some buyers — primarily investors — into a holding pattern.

All things being fairly equal, Causeway Bay is still a shopping Mecca, and some healthy changes could be on the horizon. With little space to move, residential redevelopment is the only option. The Urban Renewal Authority lists no projects planned for Causeway Bay (or Eastern District), the Lands Department has made nothing available in any of its recent sales (there´s nothing to sell) and so Pavilia Hill could be the closest a new residential project comes to CWB for some time. No wonder the protesters didn´t keep buyers away.