HK Island MTR Extension - Opportunities

HK Island MTR Extension - Opportunities

( Mid-Levels, Sheung-Wan, Western, Kennedy Town, etc.)

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As my latest contribution to Geeky, "value-added" threads, I offer THIS ONE for those who are interested in Property investment opportunities driven by the MTR Extension on Hong Kong Island. The areas that I am thinking about include: Mid-Levels, Sheung-Wan, Western, Kennedy Town, etc.


When I lived on HK Island, it was on the Peak (hence my OTP name.) So I cannot claim to be an expert on this area. We have many others posting here regularly who know the area far better than I. So I will kick-off with a contribution from one of the frequent posters here.


(From LGMV's notes on areas he favors for investment in mid-2012):

"Mid-levels small flats: Bella Vista on Ying Fai Terrace, Cameo Court on Caine Road and Parksdale on Park Road/Bonham Road (opposite new MTR station on Bonham Road). Tin Hau (limited supply, up and coming), Fortress Hill (new Oil Street development, great connections) and North Point (will be a new transport hub when the North Island Line is built)."


The Mid-levels suggestions are the ones that I want to highlight and look at more closely.

(LLoyd was very accommodating, and followed up his orginal note, with further info):


QUOTE, LGMV -

With regard to the properties I suggested:


BELLA VISTA on Ying Fai Terrace has been the one that really pays. Obviously, there are bigger and better ones but I'm just a small potato landlord and first generation Hongkonger. It usually rents out within a week and you can pick and choose amongst tenants - usually single young professionals that want a decent place to sleep close to Central and SOHO and are not too fussed about space. Developer is Henderson Land and management good. I don't own in


CAMEO COURT but it has a good layout and it is on the southern side of Caine Road which means you usually get a great view as the hill falls quite steeply (think Old Bailey) and the flats beneath aren't that tall.


PARKSDALE is actually too small. You can rent it out but it's not so easy. Having said that, it is just oppositie the new MTR station on Bonham Road and the Park Road is very pleasant and close to top schools and HKU. Anywhere else, this would be described as 'bijou'. The land it stands on is worth a fortune so there may also be a huge redevelopment play for a very low entrance fee (3-4m for a small flat). This because Parksdale is a relatively new (built 1994) small block of flats (48 units on 24 floors, 2 flats per floor) wedged in between two really old blocks (56, Bonham Road built 1968 with 18 units, 9 floors and 2 flats per floor; and Bonham Crest built 1976 36 Units, 8 floors, 2 flats per floor). Now the blocks either side can be bought up if 80% consent once they are 50 years old (namely 2018 and 2026). However, if a developer wants to to get all three sites and merge them like Swire, it would have to wait until 2044 for the Parksdale to hit the 50 year mark. Either that or pay through the nose for the Parksdale flats.


Why would a developer do this? The plots maybe not big enough but there is a concentration of a small number of flats (only 102 flats in all 3 developments) on an extremely valuable site. The location is opposite the only MTR station in Mid-levels (the new Sai Ying Pun on Bonham Road), across the road on Park Road is the prestigious St Stephen's Girl School and it is the best school district. It is also a few minutes from Hong Kong University and the new Centre Street escalator. If all three blocks were bought up, merged and redevoped, I think 50,000 psf final selling price (as at June 13, 2012) would be a breeze as many of the flats would also have full harbour views. Why am I telling you this? Because I can't afford to buy up any more flats.

=== UNQuote =====

+see: xx

The plot size of these three developments may be too small. Does anyone in the property industry know if these sites could be merged and a new luxury development built there?

(For the RECORD here):



traineeinvestor (1 day ago)


@Loyd - thanks for the information. Based what I can see on-line they are asking around HKD8,600 psf for a unit in 56 Bonham Road which is quite cheap compared to the newer developments in that area but not so cheap that I would regard it as a bargain. Bonham Crest is asking around HKD10,700 psf.


== ==


Posted by Loyd Grossman is Miss Venezuela (1 day ago)


But with 56 Bohman Road you only need to buy 4 flats and you have over 20% of the building which would be sufficient to block a compulsory buy-out LOL. Ten flats and you control it, 18 flats and you own it outright. And, no, I don't own anything at 56 Bonham Road for the sake of transparency - just one flat next door. Ultra-cheap for such prime land. Better than Causeway Bay where that guy has just sold a commercial block for HK$1bn.


/per: Main thread

Residential and commercial values may differ but if you have 2,000 sq ft flats selling at 40,000 per sq ft that's 80m per flat. Only 10 flats is 800m.

56 Bonham - price doesn't seem to be ridiculous


This charming apartment features a spacious modern bathroom, an open plan equipped kitchen and floor-to-ceiling expansvie windows overlooking the adjacent communal terrace. Supermarkets, banks are nearby with buses/minibuses in front of the building. The future MTR is a few minutes walk away. A good investment property with a high rental yield 5.2%

出售盤: HKD8,000,000

每sqft: HKD9,302

建築面積: 860 sqft

建築年份: 1969



/see: http://www.propgo.com/hongkong/residential/property.page/1842964


CL's Estate Page: http://hk.centadata.com/pih09/pih09/estate.aspx?type=1&code=TZDDTHMRHT&lang=eng


I wonder what the view is like?

If my memory serves me correctly, there is no lift. But apart from that, it's a buy. Below 10k in that area for 860 sq ft is reasonable. I also think there is good usage of space.

It may have a lift. Not sure. It's not just rent, it's the location. But no lift, hard to rent. Need to cut about 25pc of going rate.

(Let's keep going on Lloyd's List...)


Bella Vista / 蔚晴軒

Address

Ying Fai Terrace, Mid-levels West


Basic Info

Located in lower Mid-levels, Bella Vista offers 2 bedrooms and 3 bedrooms apartments taitored for couples and small families. Comprehensive facilities such as swimming pool, sauna, gym, children's game room and billiard room can be enjoyed.


Size of Development

Single building consists of 174 units. It has 6 units per floor on 2nd floor to 18 floor. Starting from 19th floor to 36th floor, there are 4 units per floor. Units size from 462 sq.ft. to 738 sq.ft.


Size: 581 sq.ft.

Bedrooms: 2

Bathrooms: 1

Price: HK$ 7,000,000

Monthly Repayment:HK$ 23,645 (@ HK$ 12,048 p.s.f.)

/link: http://tinyurl.com/MidL-BV1


To me, that seems a really small flat for $7mn.

I'd rather stay in Kowloon and enjoy my superb clubhouse and excellent open view, which comes with more space besides.


I suppose it does appeal to people who feel they "really. really must... live in Mid-levels" with a certain amount of disrespect, I would refer to such folks as "Mid-Rons", since they often lack flexibility, and pay through the nose for their "requirement."


I think I would opt for the other LARGER flat, and just deal with the stairs, if there is no lift.

=== ===


Yield calculation - based on another flat


This one is for rent:

HK$35000 per month, 682sq. ft., 2 bedrooms, 1 bathroom, Green View, Garden


That's $35,000 / 682sf = $51.31 x 12= $616 psf

Possible Gross Return: $616/ $12,050 = 5.1%


That is probably realistic for an older flat in that location, and you might have to factor is some annual repairs.

OTP. Got in a lot cheaper. Just saying it's very easy to rent. Keep an eye on it, visit it and if somebody panic sells, move quick. Very few bargains now inspite of Ed's macro obsession.

Yeah, that may makes sense.

The yield is not bad, especially if it comes with minimal voids.


I am not in the buying mood right now, but in 6 -12 months, you never know.

Hence the thread. It is worth keeping track of some properties in the ML area.

Bella Vista is between Mosque Street and Caine Road near the escalator so yes it is in old Mid-levels - so we are off topic.

Remmy's remarks from the ML thread:

(1)

Of these I really like Bella Vista on Ying Fai Terrace as an investment.


Very easy to rent to a typical "ex-pat" tenant, excellent management (and reasonable body corp fees), has a nice pool and gym (which not many of the smaller or older places on the midlevels have), high quality construction (nice lobbys, facilities, interior etc), low maintence, and upside there once all the construction around that area is complete.


I have 2 places in Bella Vista, Mid Levels, both valued around 6.5m, one rented at 19.5K, and one at 21K, both to excellent tenants with good expat jobs.



Another good one to add to the list is Bellevue Place (just off Caine Rd on Ladder Street).


(2)

I should also add Kingsfield Tower to the list. And for people with a bit more cash, and prepared to do a rennovation, Realty Gardens on Conduit Rd.

Actually, a few years ago the MTR drilled around the Botanical Garden area and Government House (top of Glenealy if my memory serves me correctly). I think it had something to do with a proposed station called Central South which was to have been part of the Shatin-to-Central (actually Shatin-to-Admiralty) line. Not sure why it was ditched. Maybe something to do with the wrong kind of soil.