A co-founder of Hong Kong shared space firm Campfire has teamed up with a former executive of Hong Kong-based developer Sunlink to buy a suburban community mall in the New Territories that has stood empty for over ten years.
The co-working provider’s Wang Tse and business partner Michael Tsang, both under-40 Generation Y entrepreneurs, have paid HK$170 million ($22 million) for the three-storey Greenview Court Shopping Centre on Castle Peak Road in Tsuen Wan West, securing the property for 35 percent less than the price it was listed for in 2017.
Wang, whose shared space brand now boasts ten locations – including one in London’s hipsterized Shoreditch – told Mingtiandi that he intends to upgrade the shopping centre for retail purposes, as a separate business from his co-working enterprise
Leveraging Tsang’s experience in repositioning real estate assets with Sunlink, the investors plan to upgrade the shopping centre to reposition it as a community retail hub serving the needs of residents in Tsuen Wan West.
“We’re going to reactivate what is now just a dead space and turn it into something that will benefit the local community,” the Campfire founder told Mingtiandi.
Buddhist Temple Dream Falls Off the Path
The previous owner, a Buddhist monk, had bought the mall for HK$49 million in 2012, planning to convert it into a temple.
“It’s an asset that had been on our radar for a long time,” Wang said.
The Campfire boss, together with Tsang, moved to acquire the asset four weeks ago, despite the city being in the grip of a crisis that has cooled the property market, as prices for many property assets have begun to soften in Hong Kong.
“Looking at things historically, Hong Kong has had other crises but has always bounced back very quickly,” Wang said. “The narrative for investment in Hong Kong mid- to long-term is still compelling, and decentralised community malls offer strong value add opportunities.”
Wang, who sits on the board of Thai developer Country Group, has also dabbled with other ventures besides shared space including co-founding the Avendale International Kindergarten in Tseung Kwan O.
Targeting Suburban Spending Power
Part of the 1980s Greenview Court residential development developed by Cheung Kong Holdings, and now held by CK Asset after Li Ka-shing merged Cheung Kong with his Hutchison Whampoa group in 2015, the 39,806 square foot (3,698 square metre) Greenview Court Shopping Centre, despite suffering years of neglect, is well positioned to take advantage of Tsuen Wan West’s 38,000 population, according to Wang.
With residential prices having risen some 40 percent from HK$10,000 to over HK$14,000 since 2016, Wang said the area’s spending power is close to that of upwardly mobile Sha Tin.
Currently overgrown with foliage after over a decade of standing empty, the mall is set to get a makeover under the pair’s ownership.
The facade is earmarked for an upgrade, and the area surrounding the mall will be re-landscaped, while alterations will be made to bring in more natural light and ensure the amenities are in line with current standards.
With the mall’s accessibility falling below today’s standards, Wang and Tsang are planning a complete overhaul of the mall’s entrances and exits routes to accommodate people with mobility challenges.
Pick-up areas are also going to be improved, allowing users of the mall to pick up or drop off people more easily by car.
“The mall’s shortcomings, including the former landlord’s lack of direction, have hindered its success previously, and we want to relieve it of all the things that were restricting it in the past,” Wang said.
Citing Fortune REIT’s Belvedere Square community mall – also in Tsuen Wan West – as an example of how to do things well, with its supermarkets, wet market, household goods stores, restaurants, and learning centres. Wang said that he and Tsang aim to bring in a curated tenant mix similar to Belvedere Square’s while offering rents that will not price out occupiers.
“It’s a shame to see a such vibrant and populated area not be able to benefit from a mall that could be occupied with services and conveniences for the local community,” the Campfire founder said.
Following on the Heels of Chinachem and CK Asset
Tsuen Wan West’s biggest landlord, Chinachem Group, which leases out almost one million square feet of retail space in the area, last year launched a HK$400 million refurbishment of a ten-year old mall in the Nina Tower, also in Tsuen Wan West, with CEO Donald Choi saying at the time that the group was optimistic about the prospects of the area.
CK Asset also has a continuing interest in the area, with the company’s 430,000 square foot OP Mall scheduled to open by the end of the year next to Tsuen West station in its Ocean Pride residential development.
In an indication of market sentiment towards the area, three weeks ago homebuyers bought all 216 flats on sale at Billion Development and Project Management’s launch of the second tranche of homes at its Aurora complex in Tsuen Wan West, just a ten-minute drive from Wang’s Greenview Court community mall, netting the developer HK$1.76 billion.