By Uncle Cheng
The local economic boom continues despite the volatility in the stock market, which has been behaving like a see-saw in the children’s playground. Walking about Hong Kong I see evidence of a tremendous increase in new retail businesses.
In Central district the sky-high rents make it impossible for poorer newcomers to obtain retail space. Only the big international companies with their famous brand names can afford to exist.
Occasionally you see a new shop taken up by a struggling small-scale entrepreneur but their window displays are usually no match for the extravagance of windows at places like Louis Vuitton and Hermes. Go inside these high-end boutiques, pass the black-suited security guards with their intercom earpieces, and it is another world — the world of the mainland shopper. In one luxury boutique I spotted one mainland businessmen who was escorting six pretty young girls and paying for all their many purchases.
In Causeway Bay there is also evidence of boom times but there the new businesses are different — cheaper products and fast-food outlets for those in a hurry between their shopping expeditions. As for the shopping malls I suppose it was the huge success of Pacific Place that changed Hong Kong for ever. I recall when Pacific Place first opened its doors, there was much scepticism — ‘the location is not convenient’ was a frequent comment. Of course, the sceptics were not just wrong, they were hugely wrong.
Then came the even bigger shopping extravaganza of the IFC mall. Again I heard people express scepticism about the location. Yet IFC’s first years have been if anything even more successful than Pacific Place was in its early days. The massive, iconic skyscraper above the IFC with its thousands of well-paid workers, has transformed the entire area.
The big question now is if the MTRC can repeat the success of the IFC development with its even bigger venture in West Kowloon called Elements. The International Commerce Centre (ICC) above Elements is going to be even taller than IFC at 118 floors. There will also be new boutique hotels and the entire area is surrounded by luxury apartment blocks. Banks like Credit Suisse, Morgan Stanley and Deutsche, are flocking to the ICC, attracted by rents only a quarter of those at the IFC.
What makes the ICC venture especially fascinating is that this is the first time a property developer has tried to attract businesses, like banks, away from their traditional bases on the Island to Kowloon. Massive changes are underway and I suspect that Central is going to be transformed in the process.
I have an interest to declare. Many months ago my entrepreneurial godson Xuan conceived the idea to open a restaurant in Elements. My experience of the catering business is almost zero. About fifteen years ago I did invest a tiny sum in a brasserie-type restaurant called D&D in Wyndham Street. D&D was way ahead of its time, too minimalist for those days.
Anyway I like what the MTRC is doing at Elements and gave Xuan my blessing. If Elements succeeds, I guess his new restaurant will succeed as well -- until the first rent review comes along.
This is Hong Kong after all.
Thursday, January 17, 2008
By Uncle Cheng