Hemlock's Diary
14-20 September, 2008
Mon, 15 Sep
What better way to start the Mid-Autumn holiday than with some rigorous exercise on an on-line millimetre-to-feet converter?  Hong Kong property developers show their apartments’ floor plans in millimetres because even one small bedroom can be measured in thousands of the things.  Smart consumers think in terms of doors – as in, “the smaller bedroom is about three doors by three.”

According to a
squarefoot.com.hk ad, a 690 sq ft ‘C’ apartment in Kerry Properties’ hippest new space at Soho 38 – just by the Mid-Levels Escalator below Robinson Rd – will cost a mere HK$8.98mn (US$1,150,000), or HK$13,014 per sq ft. Including stamp duty and agents’ and lawyer’s fees, the purchaser will probably shell out something closer to HK$9.5 million, or around HK$13,700 per sq ft. 

Except…  If we wedge a bit of the larger bedroom that sticks out to the right into the similar-sized gap at the bottom right, we can create a neat rectangle with a yellow line.  It transpires that the property has about 520 sq ft of area.  That’s HK$18,250 per sq ft.  The missing space is probably in the elevator shaft, hallway, stairwell and elsewhere.  This is perfectly legal, and any official suggesting the law be changed to give consumers a more honest description of the size of apartments gets a call from property developers, after which he mysteriously changes his mind in an instant.

“High rental yield is for sure,” promises the vendor at squarefoot.com.hk.  (Presumably he is a committed Marxist or Buddhist and wants to sell because he dissaproves of such things.)  A 5 percent return (as
postulated by local Communist propaganda sheet Wen Wei Po) would require a renter to pay HK$475,000 a year, or HK$39,583 a month.  This is within a Dragonair pilot’s housing allowance.  The flat does come with fitted kitchen and some incomprehensible digital home stuff concerning remote-controlled domestic appliances and a portable video door phone, so you can decide whether to let a visitor enter the block while sitting on the toilet.  The building also has a clubhouse with gym and something called a sky garden.  Developers include these features because they justify extortionate management fees, paid for either by owner or tenant, which keep the profits rolling in every month into the distant future.

HSBC shares yield around 5% in dividends, and you don’t have to worry about fixing their plumbing and air conditioning.

The prospective tenant might notice that the air-conditioner platform outside the kitchen knocks more than another 3% off the space – bringing us down to just under 500 sq ft, including a 36 sq ft veranda and around 25 sq ft of shelf-like areas next to the bedroom windows (which if your bed is the right height you could probably slide a bigger mattress onto).  So actual indoor floor space can’t be much more than 450 sq ft, if that.

What am I saying?  41,806,368 sq mm!

The ‘B’ apartment – the studio – fits with ease into the ‘C’ unit (the red square) and is officially listed at 400 sq ft.  I make it 4.3 by 4.9 doors.
Tue, 16 Sep
The smirks on the Mid-Levels Escalator this morning suggest that not everyone is in deep mourning for the 158-year-old Lehman Brothers.  For every employee of the bankrupt investment bank, there are several of virtually collapsed insurer AIG, and several more of the possible next victims of the credit crisis, Morgan Stanley and Goldman Sachs.  But their unmistakable glumness is far from infectious.  They are hugely outnumbered by those of us who work for the humbler, less-exalted and far less glamorous 99 percent of the corporate world that doesn’t rent horribly expensive office space in the city’s tallest skyscrapers a half-dozen floors at a time.  And that doesn’t give bright, presentable, but not-that-special-really young Anglos and US-schooled Mainlanders a Hong Kong housing allowance that qualifies them for a 290 sq ft, luxury cell in a ‘B’ model apartment of a hip and trendy tower jammed into the ancient streets up the hill from Central.  ‘B’ for bonk-pad, presumably.

The senior investment bankers live in the genuine lavishness of the Peak or the south side, in sprawling two-storey duplexes with garages, basketball hoops, little swimming pools and no way of noticing whether hundreds of square feet of advertised space is missing – in a storage room full of the wife’s carpets and milk-shake ingredients, perhaps.  The Mid-Levels is where their young, single juniors live.  Or used to live?  Maybe we should erect a plaque as part of the Big Lychee Historical Heritage Trail.  We already have ‘Sun Yat Sen lived in a building in this location 1893-95’ outside the 7-Eleven and ‘Jose Rizal lived in this neighbourhood 1897-98’ next to a pretentious Soho restaurant where the revolutionary’s Filipino compatriots today do such sterling work as waitresses.  ‘Trainee masters of the universe dwelt here, 2004-08, arriving on a wave of Alan Greenspan’s irrationally exuberant interest rates and drowning in a flood of securitized, diced, re-packaged financial sewage’.

It is not just neighbourhood landlords that could notice if all our young I-bankers were to vanish.  Behind a tasteful purple screen using up a stretch of pavement people are supposed to be allowed to walk on, workmen are putting the finishing touches to Soho’s latest Exciting Exclusive Cool Themed Concept – Cicada.  Only a restaurant group that reverses the word ‘acetone’ to create an outlet called Enoteca on Elgin would have the, shall we say, imagination to name its ‘Asian tapas’ emporium after a cockroach.  Can such businesses live on Dragonair pilots alone?
Who can fail to love these Australian and British aviators who ask in all innocence whether HK$40,000 a month is reasonable for a renovated 1,000-sq-ft mega-studio with big flat screen TV in a crumbling 38-year-old walk-up among the rat-infested alleyways south of Hollywood Road?  The skeptical looks on their faces when you tell them their housing allowance is over three times the average income of a Hong Kong family are a delight.  But they’re out of town a lot.  And the rest of us don’t buy overpriced dimsum, even from outlets not named after gross-looking insects.  So without the youthful, carefree, whizzkid financial traders, some of these tacky eating places might have to go.  Maybe the whole corridor from IFC Mall up to Robinson Road will lapse back into the faded anonymity we so painstakingly gentrified it into in the 1990s.  That’s why the rest of us are smiling.  Nothing personal.

Wed, 17 Sep
For the 166th year in a row, Hong Kong receives the Cato/Fraser Institutes’ highly coveted
Coolest, Swingiest Place in the Solar System Award.  There are two possible reasons why the Big Lychee is consistently recognized as the freest economy – either everywhere else actually manages to have bigger, more intrusive government, or the institutes doing the awarding are using the wrong criteria.  Among our many claims to socialistic fame…
- Over 40 percent of the population live in subsidized public housing, trapping them in neighbourhoods with no jobs and making them child-like, entitlement-minded wards of the bureaucracy
- The world’s first and only state-owned Disneyland
- All land nationalized, its use tightly regulated for reasons that disregard the city’s economic well-being
- The Government to blow HK$2 billion on a cruise liner terminal on the grounds that the private sector won’t do it because it will lose money
- The free world’s highest density of state-owned shopping malls, courtesy of the mostly publicly owned/funded MTR, which puts the indistinguishable retail palaces on top of its main rail stations
- The mental disease that is Financial Secretary John Tsang’s obsession with turning Hong Kong into a ‘wine hub’, including a HK$500mn per year handout to the trade in the form of a tax cut on wine and beer
- Tsang’s other fixations – Islamic banking and commodities exchange hubs
- The Cyberport state-owned, gleaming office block offering subsidized rents to firms that can con civil servants into thinking they are cool and high-tech
- A state-owned, gleaming hotel next to it
- State-owned hotel facilities at Disneyland
- More state-owned hotels than Pyongyang, probably
- Officials’ compulsive accumulation and hoarding of HK$1.4 trillion in reserves
- A looming, very murky handout to person or persons unknown to make the desolate and polluted Lok Ma Chau loop fit for human activity
- Reserved seats in the legislature for representatives of certain industries, many of the sunset variety, which incessantly beg the Government for favours, free lunches, protection from competition, and immunity from public interest
Which brings me rather neatly to the 23rd South China Morning Post article in a week proposing that the Liberal Party somehow transform itself into a warm and cuddly grouping that our free-thinking, clean-living, hard-working bourgeoisie can adore…
The idea that the Liberal Party can refashion itself is absurd because the group has one and only one raison d’etre – the promotion of the selfish and grasping interests of family-owned textiles companies, owners of taxi and minibus firms, landlords of hotels and retail premises and wholesale cartels.  It is a little mafia of yesterday’s tired, anti-innovation loser industries that can only turn a buck by colluding with one another and/or officials in order to skim off the wealth created by everyone else.  Add to that the intensely slimy and unprincipled nature of the personalities involved, and the idea of a makeover becomes even more laughable.  Not to put too fine a point on it, is there anyone – other, perhaps, than next of kin – who does not loathe James Tien?  Mainstream pro-democrats?  Can’t stand him.  Pro-democracy labour unions?  Hate the man.  Pro-Beijing unions?  Ditto.  Mainstream pro-Beijing groups?  Detest him.  The Government?  Wouldn’t trust him for a second.  Beijing?  Doesn’t trust anyone, but seems to find Tien more than averagely distasteful.  The Filipino elves?  I interrupt their cleaning and show them a photo of the textiles scion.  Their reaction is of the just-stepped-in-something-nasty sort.  Embrace a new-look Liberal Party?  Hong Kong’s decent and tolerant middle class would sooner drink to John Tsang’s central planning mania with dog vomit.
ON THAT cheering thought, bags are packed, and I will shortly fly to the Western World where two weeks of filial duties and other diversions await, and diary-writing will wane.
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