Expecting some funds
Watson's Great Lite Hope

Let's knock it all down and start again

At the start of the year, I mentioned the curious business of the housing estate in Hung Hom that the government built and then decided it didn't want any more.  At the time, the developers who kindly took this so-called white elephant off the government's hands said that they would probably knock it all down and turn it into a park put up some rather swankier apartments instead. 

Now the developers have confirmed that is exactly what they plan to do.  Cue predictable outrage from environmentalists and people who think that the property companies are profiteering.  In Hong Kong, as well, where that type of stuff almost never happens. 

Simon is upset as well, mainly at the fact that the shareholders of SHKP and NWD are profiting at the expense of everyone else in Hong Kong.  Nothing new there, though.  Property companies have become rich by virtue of being able to acquire sites as cheaply as possible and negotiate the lowest possible land premium, then sell the completed apartments for the highest possible price.

Many years there was a big fuss in the UK because a property company built an office block (Centre Point) and deliberately kept it empty:

Centre Point became notorious because it remained empty for years. The economics of this was that, as rents were rising so sharply, it was better to leave it empty than rent it out and tie its value down to a particular rent review period. This was because the capital appreciation was greater than the lost rental income. It's construction cost in 1964 was £5.5 million whilst its estimated market value in 1973 was £20 million. The icing on the cake was that as it was empty it was not liable for rates [a form of property tax that applies in the UK (and Hong Kong)].

Property companies frequently knock down perfectly good buildings in order to put up something new in their place, and in Hong Kong it is common for buildings that are only 20-30 years old to be demolished.  However, this is a particularly extreme example, and amazingly it even seems to have provoked criticism from the government - the Secretary for the Environment, Transport and Works, Sarah Liao, said today that the developer's decision is not environmentally friendly.  I think I must have been living in Hong Kong for too long, because somehow I can't seem to get upset about this.

Only in Hong Kong.

Comments

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gerrylondon

Centrepoint is now considered an architectural landmark and the apartments in it are desirable and expensive. A friend of mine almost bought one for £350,000 recently. But the property market has turned in London. Hong Kong has always been a place of speculation and exploitation and greed. I'm terribly disappointed that after all these years of higher standards of living, there are still silly scandals surrounding housing estates. But then, unfortunately, the Beijing variable in the equation of Hong Kong. Someone really has to bring these Beijingers up to higher standards of civilization, ones that don't just aspire to the United Standards of Avarice.. Wonder if there's a job for me there, ho hum....

Gillian

Even as a HKer, I found it extremely ridiculous to pull down a whole brand new building. I think I can never understand their mindsets. Have they ever considered the waste generated from the reconstruction? Though they claim to re-use 90% of the material, I doubt the truthfulness of their words. I'm pretty sure that they are just playing on the figures and the waste will be dumped into the ocean.
And for the worse, Chris brought out a cultural problem. Nature, or environment, is of no importance in Hong Kong's history or even the cultural. We only consume the nature without a second thought. It's horrible to learn the fact that it's just too easy to become emotionless to the surroundings, except from money, in this society. What will be the future of HK if this phenomena remains? I'm worried.

Chris

Today's news is that the developers have changed their mind and will renovate rather than demolish these apartments.

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