Property

HKRI—Marking their 40th year milestone

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HKR International Limited (HKRI) is famed for creating Hong Kong’s largest private residential complex—Discovery Bay—40 years ago, and they have not slowed down since. Expanding into a host of other opportunities including real estate, hospitality, commercial property and even healthcare, the company seems on the path to reaching even farther heights.

This year, the Group celebrates its 40th anniversary, as well as the completion of its ambitious, nearly RMB 18 billion, HKRI Taikoo Hui project that is set to transform Shanghai’s Jing’an district. Following our previous issue’s discussion of the Group’s journey thus far, we continue conversing with deputy chairman and managing director, Victor Cha Mou Zing, on HKRI’s vision for the future.

What are your views on China's property market?

With a huge population of 1.4 billion and strong estimated GDP growth of over 6.5% in 2018, China’s property market is still growing.

HKRI has a balanced portfolio of residential and commercial property, and geographically, we are pursuing a ‘one-third’ strategy. That is, one-third for Hong Kong, one-third across the rest of Asia and one-third in mainland China, developing the Greater Yangtze River region.


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What will HKRI bring to the mainland Chinese market?

Big things are happening on the mainland. Our flagship project is the new mixed-use development project called HKRI Taikoo Hui. Representing a total investment of nearly RMB 18 billion, it is a 50:50 joint venture with Swire Properties.

Located in a prime location, when it opened in November 2017, it already had an occupancy rate of 87% for office space and 96% for retail. With a total gross floor area of 323,000 square metres, it includes a mega shopping mall, two office towers, two hotels and a serviced apartment tower, as well as Cha House—a 100-year-old historic building that was originally the mansion of a wealthy family which later became a secondary school.

Cha House was originally located in the middle of the new development. Instead of demolishing it, we chose to make it an integral part of the ground plan. That meant moving it some 57 metres across the site. That's a rare feat and not a typical consideration anywhere else in Asia's property sector.

As well as being a milestone in mixed-use projects, HKRI Taikoo Hui is a symbol of our vision and long-term commitment to mainland China’s market. It demonstrates that we aren’t only focused on property development but also investing in commercial and mixed-use properties for a diversified portfolio.

At the same time, we have a number of residential projects in the Yangtze River area, such as City One and Rivera One in Jaixing, the Oasis One in Hangzhou, and the Elite House in Shanghai. We acquired two sites in Jiaxing in late 2017 and early 2018, and we’ve won many awards for the quality of our projects.

The Chinese government is going to develop the Greater Bay Area. Is this an opportunity for HKRI to grow the business?

There is definitely a lot of excitement surrounding the Greater Bay Area and for very good reasons. In a report exploring the opportunities it will bring for local enterprises and residents, PwC pointed out that the total GDP of Guangdong, Hong Kong and Macau was equivalent to approximately 14% of the national economy. That makes the region “as rich as a country” in terms of economic size and population.

Discovery Bay is located in the northeastern part of Lantau Island, very close to where the Guangdong-Hong Kong-Macao Bridge comes ashore. It will undoubtedly benefit from closer connections with mainland China and Macau but so will the rest of Hong Kong. That includes the CDW Building in Tsuen Wan, which is well positioned to tap into this huge infrastructure project, and will enjoy even better connectivity with the Pearl River Delta and Macao when the bridge opens.

PwC also noted that the Greater Bay Area has a prosperous hospitality and tourism industry, healthcare, insurance, finance and real estate development sectors, and automobile and home appliance manufacturing. These are all excellent indicators for success and maps closely onto HKRI’s business footprint. We will closely monitor the situation and look for ways to blend our projects into the way the area develops.


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What is your advice on running a successful property business? Could you share some trade secrets with us?

The property industry is certainly challenging. My father, Dr. Cha, famously said, “Our family has been in textile and agriculture. One year running a textile plant is like five years in the fields.” Now, with us moving on to property development, one year running the business is like five years running a factory.

HKRI has never been a property developer in the traditional sense. What we do is ‘Create a Lifestyle’. Today, the HKRI brand has come to embody high-quality, stylish living that embraces comfortable accommodation, smart working, fine dining and most important of all, good health.

It is our goal to bring positive changes to the communities in the places where we operate, both for the short- and long-term. Indeed, with Discovery Bay, we had pioneered many concepts that are now commonplace in Hong Kong residential complexes.

The last 40 years have been a remarkable journey, filled with excitement and satisfaction, and more than a few difficult moments. With respect and a passion for innovation—shown clearly in projects such as Discovery Bay and HKRI Taikoo Hui—we overcame it all by always working as a team and embracing change, becoming stronger and wiser in the process.

HKRI is celebrating its 40th anniversary. Which project or development has been the most successful for the company and why?

That’s like asking a parent which child is their favourite! Seriously, every project is important to us, and that approach has produced many successes and built an excellent reputation for HKRI in the market.

Having said that, I can tell you that Discovery Bay has certainly been one of the highlights. Within 40 years, we have created a unique and vibrant community virtually from scratch. Another high point is definitely HKRI Taikoo Hui—an RMB 18 billion mixed-use project in the heart of Shanghai which is closely tied to the economic development and lives of local citizens.

We also have some luxury projects in Hong Kong. One of these is La Cresta in Sha Tin, with one unit comprising of two apartments and a portion of the roof selling for over HK$100 million. Another great project in the making is our development on Lo Fai Road in Tai Po which is now underway.


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What is HKRI’s plan for the coming five to ten years?

Simply put, our plan for the next decade is to maintain a balanced portfolio of residential and commercial property—short-term sales and long-term investment. In terms of geography, the mix will be one third in Hong Kong, one third in China and one third across the rest of Asia.

In mainland China, that means maintaining a focus and sourcing good locations in the Greater Shanghai region, where we already have a strong brand and reputation. We have strategically diversified our portfolio and built land banks across Asia. At the same time, we are continuously exploring opportunities in markets with fewer restrictions that offer more flexibility and possibilities.

We also have a good foothold in other Asian property markets, such as Thailand and Japan, which we intend to leverage for future success. Last but not least, we aim to deepen our diversification into the hospitality and healthcare industries in line with our motto—'We Create a Lifestyle’.