Joined
·
138,093 Posts
Doubters question tourism plan for Wong Chuk Hang
A bevy of new hotels is set to redefine the old industrial area, but some property analysts fear they will not draw the crowds
18 May 2005
South China Morning Post
The skyline of Wong Chuk Hang, the industrial area close to Aberdeen, will change over the next three years with the $5.5 billion revamp of Ocean Park and developers' plans to raze industrial properties and build hotels.
The change to the area is part of the government's attempt to transform Wong Chuk Hang and Aberdeen into a tourism destination, sparking a wave of redevelopment.
However, some property analysts fear the plan may be too ambitious as there is virtually no customer base to support the new hotels.
The Town Planning Board has approved plans to replace nine industrial buildings in Wong Chuk Hang with hotels.
Chinachem hotel division director George Kuk said: "We see great potential hotel redevelopment in the area because of its proximity to Repulse Bay and Deep Water Bay."
But the owner decided to hold on to the property in anticipation of further property price increases.
Mr Kuk said the multibillion-dollar makeover plan for Ocean Park, initiated by park chairman Allan Zeman, would boost demand for hotel rooms.
He said not all visitors would want to stay overnight at Ocean Park. "Some will prefer to check in to hotels nearby."
Mr Zeman unveiled the $5.5 billion plan for Ocean Park in March. The completion date is 2010.
The proposal is for three Ocean Park hotels - the Ocean Hotel on the waterfront near the entrance, the Summit Spa and Resort, and the Fisherman's Wharf in nearby Tai Shue Wan.
"Anything to take away the old and ugly-looking buildings is good [for the area]," Mr Kuk said.
But property consultants said the future of Wong Chuk Hang depended on a strong tourism inflow and land premium talks with the government.
Consultants said the government had recently set up a taskforce to review tourism-type developments on the south side of Hong Kong Island but it had not decided if it would offer loans for the Ocean Park project.
However, other big players such as Cheung Kong (Holdings), Sun Hung Kai Properties and Henderson Land Development have bought factory sites in the area.
The developers are now negotiating land premiums with the government.
Alva To, research director at DTZ Debenham Tie Leung, doubted the area could become a tourist and commercial centre.
"With developers' investments focusing only on hotels, there are no supporting facilities such as shopping malls and offices to create a cluster effect [to ensure a customer base]," he said.
Jones Lang LaSalle regional director Lau Chong-kong expected the first batch of hotels to be in the low- to mid-range segment.
"Hotels will have food and beverage outlets just to serve their guests," he said.
But he said developers would be interested in building office blocks and shopping malls once most of the hotels were built.
If the MTR line extends to Ocean Park, the journey from Admiralty to the park will take about five minutes.
Mr Lau said this would speed up the process of transforming Wong Chuk Hang into a new commercial centre.
"Improving accessibility will encourage more people to visit the area and will enhance the commercial value of existing properties," he said.
Colliers International research head Simon Lo Wing-fai said industrial space in the area rented for an average of $5 per sq ft, although quality buildings could fetch up to $10 per sq ft.
But he said developers would have more incentive to knock down underutilised industrial buildings to make way for hotel projects if high-end hotels in the area were able to rent rooms for $1,000 a night.
Average vacancy rates in the overall industrial sector were 8.7 per cent last year, down from a peak of 10.9 per cent in 2001, according to the Rating and Valuation Department.
Mr Lo said most factory sites in the area, particularly those with redevelopment potential as hotels, had already been snapped up by developers.
A bevy of new hotels is set to redefine the old industrial area, but some property analysts fear they will not draw the crowds
18 May 2005
South China Morning Post
The skyline of Wong Chuk Hang, the industrial area close to Aberdeen, will change over the next three years with the $5.5 billion revamp of Ocean Park and developers' plans to raze industrial properties and build hotels.
The change to the area is part of the government's attempt to transform Wong Chuk Hang and Aberdeen into a tourism destination, sparking a wave of redevelopment.
However, some property analysts fear the plan may be too ambitious as there is virtually no customer base to support the new hotels.
The Town Planning Board has approved plans to replace nine industrial buildings in Wong Chuk Hang with hotels.
Chinachem hotel division director George Kuk said: "We see great potential hotel redevelopment in the area because of its proximity to Repulse Bay and Deep Water Bay."
But the owner decided to hold on to the property in anticipation of further property price increases.
Mr Kuk said the multibillion-dollar makeover plan for Ocean Park, initiated by park chairman Allan Zeman, would boost demand for hotel rooms.
He said not all visitors would want to stay overnight at Ocean Park. "Some will prefer to check in to hotels nearby."
Mr Zeman unveiled the $5.5 billion plan for Ocean Park in March. The completion date is 2010.
The proposal is for three Ocean Park hotels - the Ocean Hotel on the waterfront near the entrance, the Summit Spa and Resort, and the Fisherman's Wharf in nearby Tai Shue Wan.
"Anything to take away the old and ugly-looking buildings is good [for the area]," Mr Kuk said.
But property consultants said the future of Wong Chuk Hang depended on a strong tourism inflow and land premium talks with the government.
Consultants said the government had recently set up a taskforce to review tourism-type developments on the south side of Hong Kong Island but it had not decided if it would offer loans for the Ocean Park project.
However, other big players such as Cheung Kong (Holdings), Sun Hung Kai Properties and Henderson Land Development have bought factory sites in the area.
The developers are now negotiating land premiums with the government.
Alva To, research director at DTZ Debenham Tie Leung, doubted the area could become a tourist and commercial centre.
"With developers' investments focusing only on hotels, there are no supporting facilities such as shopping malls and offices to create a cluster effect [to ensure a customer base]," he said.
Jones Lang LaSalle regional director Lau Chong-kong expected the first batch of hotels to be in the low- to mid-range segment.
"Hotels will have food and beverage outlets just to serve their guests," he said.
But he said developers would be interested in building office blocks and shopping malls once most of the hotels were built.
If the MTR line extends to Ocean Park, the journey from Admiralty to the park will take about five minutes.
Mr Lau said this would speed up the process of transforming Wong Chuk Hang into a new commercial centre.
"Improving accessibility will encourage more people to visit the area and will enhance the commercial value of existing properties," he said.
Colliers International research head Simon Lo Wing-fai said industrial space in the area rented for an average of $5 per sq ft, although quality buildings could fetch up to $10 per sq ft.
But he said developers would have more incentive to knock down underutilised industrial buildings to make way for hotel projects if high-end hotels in the area were able to rent rooms for $1,000 a night.
Average vacancy rates in the overall industrial sector were 8.7 per cent last year, down from a peak of 10.9 per cent in 2001, according to the Rating and Valuation Department.
Mr Lo said most factory sites in the area, particularly those with redevelopment potential as hotels, had already been snapped up by developers.