For residents, Tsim Sha Tsui is not someplace you want to be on a Sunday afternoon — unless of course your idea of fun is attempting to weave your way around tourists with all the time in the world and a hundred shopping bags or giant, sprawling families moseying to Kowloon Park. That’s assuming you manage to duck away from the small army of copy watch/handbag/tailor shills on Nathan Road. But then again, that controlled chaos is what makes TST one of the city’s most vibrant and popular areas. If it were to change, we’d all feel a little defeated.
The Second Central
Tsim Sha Tsui is not technically a district unto itself; it’s part of the Yau Tsim Mong district, whose boundaries are the water on the west and south, the MTR East Rail line and Boundary Street on the north. It’s not a large area but it is one of the most densely populated, tourist heavy and a major transport hub, with Hung Hom Station and the China Ferry Terminal providing access to the Mainland, and all roads to and from Hong Kong Island leading to TST. It’s a major retailing hotspot, is home to almost a quarter of the SAR’s hotels — including the city’s own grand dame, The Peninsula — and is where a slew of Hong Kong’s cultural facilities are located (the Cultural Centre, Coliseum, the space, art, history and science museums, Kowloon Park). Also: Chungking Mansions.
Government data states there are over 60 schools in a district that is heavily transient. That transience and the wealth of hoteliers as well as professionals in the office towers on Canton Road, the Miramar and Peninsula have given serviced apartment providers like The Ascott, Gateway Apartments, Shama, Xin and Butterfly among others good reason to operate there.
All of that, plus Central’s rising office prices and Causeway Bay’s world-highest retail rents, have made TST a viable option for many multinationals, particularly retail brands. According to JLL’s February 2014 market monitor, retail leasing demand in core districts — including TST — remains strong, as evidenced by major transactions at Sai Yeung Choi Street South and Nathan Road. Most retailers entering the Hong Kong market still prefer the stability of core districts. TST rivals Causeway Bay for office vacancy rates, which sat at 2.7 percent at the end of January compared to Central’s 4.6. On top of that, the government’s announced plans to increase the office space at Kai Tak to nearly 10 million square feet will be the coattails TST’s rising profile will ride on in the coming years (Kai Tak is in Kwun Tong).
Not So Dark Side
But TST isn’t all shopping and dining. Almost 300,000 people live in Yau Tsim Mong’s six-plus square kilometres. Neighbouring Ho Man Tin is the location of some of the city’s most elite property (at times it’s Hong Kong’s own celebrity row); one of Swire Properties’ latest upmarket developments, Dunbar Place, whose prices begin at over $20 million, is there.
According to third quarter 2013 research by Savills, luxury prices in Kowloon (at properties such as The Masterpiece on Hanoi Road, The Arch at Kowloon Station, and Sorrento on Austin Road) outperformed those in both the New Territories and Hong Kong Island in the period following the new stamp duties, falling less than 1 percent; in the mass residential sector prices actually rose 1.5 percent in Kowloon. At the time Savills predicted volumes would eventually rise due to widespread price discounting, a theory borne out by recent research by Colliers International.
So when we pack up and move across the harbour, where do we go, and is there any investment value on the TST side? Not surprisingly, end-users dominate in TST, like they do in much of Hong Kong right now. For better or for worse, TST is still “across the harbour,” and unless you work on that side, you’re unlikely to live there. TST can be more reasonably priced than Central or Mid-Levels — prices per square foot can hover around $10,000 in the mass market, $20,000 at the upper end — and the growth of Kowloon East proves there’s a willingness to experiment on the other side of the water. In luxury leasing, research by Colliers International indicated corporate caution in the fourth quarter of 2013 stemming from Chinese and American economic data, with the end result being weakened demand. By the same token Colliers noted, “Sustainable rising local leasing demand, expatriates arriving in Hong Kong and lower housing allowances in both finance and non-finance enterprises have resulted in stronger demand for smaller leasing units … Some tenants, subjected to smaller housing budgets, opted to downsize their units, rent or relocate to cheaper residential districts.” Districts like TST, where rents and serviced apartment rates can be lower. Whether or not that indicates a boom in TST’s residential investment future only time will tell.