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Squarefoot Magazine 81 diamond in the rough

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These articles below can also be found in the 1 - 15 August 2009 issue of Square Foot magazine:


Talk of The Town

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Diamond in the rough

 

Andre Cooray has the low-down on rundown properties in our city that are worth a mint despite their lacklustre appearance

 

 
Even in Hong Kong’s prime locations, you’ll have noticed derelict and abandoned homes in desperate need of a facelift. Have you ever wondered who owns these ‘poor little rich homes’, whether they have juicy stories behind them and what they are worth?

The grossly neglected colonial mansion on 30 Po Shan Road, Mid-Levels is hard to miss. An impressive four-storey structure, complete with spiral staircase, one can’t help but feel that it has seen much better days. According to urban legend, in the ‘60s the house was owned by a corrupt former police inspector, named Lui Lok. He literally abandoned the property a decade later after fleeing from the ICAC to Taiwan, leaving it to fall victim to decay and vandals for almost 40 years.

However, Raymond Wan, director of investment at Savills Hong Kong, the man in charge of the Po Shan property, offers a different side to the story. He says the house is now owned by the Yu Ming Group, and prior to that by British American Tobacco Ltd. Wan, who has no knowledge of the infamous Lui Lok, reveals that the 10,000-square-foot site area is currently on the market for HK$450 million. Potential buyers have the option to tear down the house and build a new luxury mansion or even two semi-detached homes, with a total gross floor area of 36,000 square feet.

Cherrie Lai, the head of residential property, Hong Kong for Hongkong Land, notes that abandoned property in prime locations, like the Po Shan Road mansion, usually stays on the market for lengthy periods of time due to big discrepancies between the asking price and what investors are prepared to pay.

Owners of these large derelict properties are fully aware of the scarcity of land on Hong Kong Island. They also have strong holding power because they tend to be in a secure financial position. Therefore, they are in no rush to sell, especially if offers made don’t meet their expectations. On the other hand, potential buyers are often put off by concerns about redevelopment potential, fearing restrictions from the government such as limitations on height and density. “They feel it can be a risk relating to the land administration side,” Lai notes.

In Wanchai you’ll see numerous derelict buildings, notably Nam Koo Terrace on Ship Street which locals call the Wanchai Haunted House. A stylish architectural fusion of East and West, it’s said to have been bought by businessman To Chun-man in 1918. The property, also known as the Red House, was used as a military brothel during the Japanese occupation of Hong Kong, and at this time To was forced to evacuate the premises. He died shortly after the end of World War Two, leaving the property to rack and ruin, and reportedly ghosts. Eerie flames are said to glow within the house’s abandoned red walls, though sceptics put this down to the fact that homeless people use the three-storey building as a shelter.

Hopewell Holdings now owns the Red House, which is listed as a Grade 1 historical building. Clearly the company was not put off by the rumoured hauntings and bought the house in 1988. It is currently awaiting approval from the government before going ahead with any redevelopment plans.

“If it’s in a good location no matter how haunted it supposedly is, buyers will be interested in the potential redevelopment of it – and if it has a good story behind it, there is an added meaning and commercial drive to the property,” says Lai.