Tokwawan home prices to benefit from completion of Tuen Ma Line
New railway unlocks redevelopment potential
HONG KONG, 30 June 2021 – Capital values of residential in Tokwawan are set to benefit from the completion of Tuen Ma Line, according to JLL's Hong Kong Residential Sales Market Monitor, released today.
Figures from JLL's research show the mass residential prices in Tokwawan have increased by 57% since the gazettal of the Tuen Ma Line in November 2011, which is slightly weaker than the 66% and 72% increases recorded for Kowloon and overall Hong Kong respectively.
However, the Tuen Ma Line, the longest rail line in Hong Kong which fully commenced operation on 27 June, links the east and west of the New Territories and east Kowloon, and connects Tokwawan which was previously unserved by the rail network. The two new stations, Tokwawan and Sung Wong Toi, will provide long-awaited rail service to residents whose current mode of transportation is limited to the road network, and the enhanced connectivity and accessibility will likely benefit the residential market in the surrounding area.
Historically, when plans for new rail lines are announced, capital values in areas that are set to benefit from the new infrastructure will usually outperform the market and then record a bump once operations commence. This was most recently seen with the Kwun Tong line extension where capital values of residential properties in Whampoa have slightly outperformed the overall market since the new line was gazette in 2009. A bump was then consequently recorded after completion in 2016 with capital values in Whampao rising 24% compared with 19% in the overall market by the end of 2017.
Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL in Hong Kong, said: "The initial announcement of Tuen Ma Line did not seem to exceptionally benefit residential prices in the Tokwawan area. However, we believe the residential demand should increase in the area in the foreseeable future given the improved connectivity, especially after the full completion of Shatin to Central Link in 2022 with the extension of East Rail Line across the harbour to Wanchai and Admiralty. As a result, if history repeats, then there should be room for residential prices in the Tokwawan area to climb further and even outperform the overall market."
Hong Kong developers already eye on the redevelopment potential in Tokwawan. Nelson Wong, Head of Research at JLL in Greater China, said: "Tokwawan is an early developed area which comprises mostly mid-20th century residential and light industrial buildings of 10 or fewer floors, built to comply with height restrictions for the former Kai Tak Airport. There are five residential redevelopment projects with a total of 3,070 units set to be launched by URA in the coming financial year. The new rail line will further unlock the redevelopment potential of Tokwawan and is expected to attract the developers' attention."
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