Can a new ‘groundscraper’ recharge Hong Kong’s buzz?

{"text":[[{"start":7,"text":"For decades, the bullet-grey skyscrapers of HSBC and Jardine Matheson have towered over Hong Kong’s harbourfront, their views of the city’s blue waters, the dense neighbourhoods of Kowloon and the green hills of the New Territories uninterrupted. So prized was that vista — one of the most striking in Asia, if not the world — that in the 1970s, when Jardines’ property unit purchased the plot that would later house its new headquarters, it demanded a stipulation in the lease that no building would ever be allowed to obstruct it."}],[{"start":39.36,"text":"Half a century later and a newcomer is shaking up that paradigm. Late next year, Henderson Land, a developer led by local property barons Martin and Peter Lee, will unveil Central Yards — a mixed-use “groundscaper” that it promises will be a “gift to Hong Kong” by opening up 4.8 hectares of renovated harbourfront real estate to the public."}],[{"start":60.6,"text":"The project will sit directly in between Jardines House and the harbourfront and rise to no more than nine storeys tall. Where once there was a scrap of underused reclaimed seafront, Henderson is planning to erect a new office space, a series of restaurants and bars, an underground theatre, 400 trees, 300,000 sq ft of public space and several outdoor event spaces."}],[{"start":87.36,"text":"This significant neighbourhood place-making comes as Hong Kong is regaining its mojo. A revival in the city’s capital markets and finance sectors has buoyed office rents and reinvigorated its central areas. Home prices, meanwhile, began to climb again last year, after a long period of decline. Nonetheless, several high-profile retail and office projects have struggled to get off the ground."}],[{"start":null,"text":"

"}],[{"start":109.68,"text":"In September, New World Development, another of the city’s largest real estate groups, paid the government HK$2.3bn ($430mn) to extricate it from 11 Skies, a planned shopping, office and entertainment project at the city’s airport, almost four decades early. A number of the city’s other malls have struggled with high vacancy rates and sluggish foot traffic."}],[{"start":133,"text":"In part, this is because the city’s luxury shopping centres have begun to lose custom to cheaper, larger and more ambitious sites over the Chinese border in Shenzhen. Creating a community hub to revitalise central Hong Kong is a high-stakes ambition for the city, re-anchoring its appeal."}],[{"start":149.96,"text":"Central Yards is the rare opportunity to redevelop a significant chunk of ultra-prime real estate, right on the waterside in the heart of one of the world’s most expensive business districts. But it aspires to be much more than just another arcade, says Henderson co-chair Martin Lee, one of the city’s richest men."}],[{"start":168.2,"text":"“I’ve been in the business for a very long time, and I do feel going to a shopping mall is quite boring,” Lee says. “So when we had a chance to acquire the land, we wanted to build [something] different . . . it must be a destination.” Henderson says it wants to prioritise experiences that can’t yet be found in Hong Kong and first-to-market brands. That, it hopes, will help to set it apart."}],[{"start":null,"text":""}],[{"start":190,"text":"Last month, British fashion designer Kim Jones announced Central Yards as the site of his first global flagship store. The 4,000 sq ft space will span two levels and feature multiple open terraces."}],[{"start":202.18,"text":"At present there is little more to see of the future of Central Yards than a construction site. The shell of what will eventually be a 400-metre-long groundscaper stretches from the city’s Central metro station towards Victoria Harbour, which it looms over like a cruise ship waiting to launch."}],[{"start":217.52,"text":"But CGI mock-ups reveal no shortage of ambition. Henderson plans 700,000 sq ft of office space; 70 per cent of it occupied in the first phase by its anchor tenant, the quantitative trading firm Jane Street. The mostly glass office space will sit on top of four floors of retail space, some of it plated in streamlined silver-coloured panelling. The roof will host a public sky garden."}],[{"start":241.22,"text":"The main building will integrate with several smaller units, 400 trees and 280 different species of plants and the adjacent harbourfront events space, which hosts a year-round roster of concerts as well as the annual music festival Clockenflap. This multilayered carpet of trees and foliage will ensure that executives in HSBC’s building or Jardine House, meanwhile, will look down on a “green carpet” that rolls towards the harbour, says Randy Liekenjie, a senior architect at Henderson. “It’s more . . . a garden that they have in front of them,” he adds."}],[{"start":274.56,"text":"Central Yards also comes as Hong Kong’s business sector attempts to turn over a new leaf. Citywide pro-democracy protests in 2019 were followed by a rolling political crackdown and years of Covid-19 travel restrictions, which dented business confidence. Commercial and residential property prices, long among the most expensive in the world, went into freefall for years."}],[{"start":297.52,"text":"Home prices fell more than 28 per cent between early 2019 and the low reached in March last year. But they have since ticked up and, by August, had climbed 12 per cent. Office prices began to recover only this year but are still nearly 50 per cent below a peak reached in 2018."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":315.72,"text":"But more recently, a capital markets comeback led by an influx of Chinese technology companies listing on the city’s stock exchange has breathed new life into the city’s financial sector. Now, as financial institutions return to Hong Kong to take advantage of the boom and a slew of preferential tax policies, there’s been a rush for prime office space, says Alex Barnes, co-chief executive for Greater China at property consultant JLL."}],[{"start":341.64,"text":"Despite the city’s reputation for gleaming skyscrapers, many of the office towers in the city’s central area are relatively old and not up to the standard that many top-tier investment banks and hedge funds demand, he adds. “There’s probably a little bit of jealousy out there, I suspect,” he says of Jane Street’s at Central Yards. The nearby International Finance Centre development, which includes what was once the city’s tallest tower, was completed in 2003."}],[{"start":367.48,"text":"“There’s a lot of firms, funds, banks, all very keen on trying to find their version of Central Yards, but there’s nothing available for them to lease,” says Barnes, adding that “Hong Kong has this beautiful skyline . . . but that centrepiece is not currently there.”"}],[{"start":383.62,"text":"One obvious comparison for Central Yard’s wider ambitions to revive Hong Kong’s harbourfront is Coal Drops Yard, the former Victorian industrial site in central London which, along with an influx of tech companies, helped revitalise the King’s Cross area."}],[{"start":null,"text":""}],[{"start":398.96,"text":"Lisa Finlay, partner at the architectural practice Heatherwick Studio, which designed Coal Drops Yards, says flexibility is key to ensuring a development becomes and remains a destination that people want to spend time in rather than just a shopping mall. That level of flexibility has to be designed in, so that the developer can play around with the events, stores and other offerings it wants to host without having to rebuild, she adds."}],[{"start":423.2,"text":"“[It takes] maybe five years even just to settle into what the place is: to what works, what doesn’t work, how you want to use it,” Finlay says. “Some people would say it takes much longer.”"}],[{"start":433.72,"text":"Another potential challenge at Central Yards is its attitude to heritage buildings. The development’s second phase, which will complete in 2032, will involve tearing down Hong Kong’s General Post Office, a 1970s modernist structure. The move has triggered an outpouring of support and affection for the idiosyncratic white building."}],[{"start":452.48,"text":"“I think what you see at King’s Cross . . . is really exploring the potential of reusing heritage and that has given a quality to the whole area that is just an absolute gift,” says Finlay. “If we were trying to do what we did at Coal Drops with brand-new buildings I think it would feel very different.”"}],[{"start":null,"text":""}],[{"start":468.82,"text":"But Tom Andrews, head of leasing and operations at Henderson, says that what differentiates Central Yards from Coal Drops Yard, and indeed other developments in Hong Kong, is its location: the project could not be on a more prominent or well-connected plot."}],[{"start":482.8,"text":"One of the things Coal Drops Yard had to do at the beginning was generate traffic,” he says. “For sure, you’ll have new exciting brands that will have queues at the door before you even open, but we also have spaces where we can rotate concepts, a little bit like the corner shop in Selfridges in London.”"}],[{"start":500.44,"text":"Central Yards’ location offers another enticing prospect: harbourside drinks late into the night. For years, drinkers in Central hoping to grab a beer by the water have been largely limited to the much-loved but markedly less swish bars that populate the ferry piers carrying residents to outlying islands."}],[{"start":519.3,"text":"“I think you can go [to] midnight, 1am, 2am quite easily. And I think with our theatre, with the event spaces, we’ll have real great activations. That means you can have a pre-theatre dinner and then a post-theatre drink with your friends,” Andrews says. “So hopefully we’ll be able to go a bit too late and people will have a few sore heads the next day.”"}],[{"start":539.52,"text":"William Langley is the FT’s South China correspondent"}],[{"start":542.92,"text":"This article has been amended to clarify that it is 700,000 sq ft of office space, seventy per cent of which in the first phase will be occupied by Jane Street"}],[{"start":553.2,"text":"Find out about our latest stories first — follow @ft_houseandhome on Instagram"}],[{"start":561.04,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794109126_6384.mp3"}