Recession? What recession? It’s 2 a.m. on Tuesday on Hong Kong’s Wyndham Street, and girls wrapped in metallic Hervé Leger bandage dresses stand outside the 7-Eleven drinking from mini-bottles of Moët, moving to music emanating from Maseratis carrying newly minted Chinese billionaires to the Dragon-I nightclub up the street. There, they’ll drop six figures in the VIP Red Room before heading back up to Victoria Peak, the city’s highest mountain, where the prices of mansions on exclusive Severn Road have surpassed even Monaco’s.
Just down the road from the 7-Eleven, expats fling off fur coats as they stumble out of the Balalaika ice bar, socialites sway onto the sidewalk smelling of the High Heel, a lemon-and-berry-infused vodka cocktail at the new French lounge Le Boudoir, and private bankers play Ping-Pong under strobe lights at Tazmania Ballroom, their shirts soaked from the multiple stops they’ve already made that evening—from Zuma, the hip London sushi import, to the subterranean speakeasy 001, then finally here to Lan Kwai Fong, the crisscross of streets that’s long been the epicenter of Hong Kong nightlife.
Three hours later, the city starts throbbing again—not with music but with money. Nearly 15 years after its handover from the English to the Chinese, the city-state of Hong Kong is beckoning international high rollers with its razzle-dazzle renaissance, and every street corner sizzles. As the sun rises, the light bounces across the harbor from the 118-floor International Commerce Center (ICC) on the Kowloon side to its sister building, the 88-floor International Finance Center (IFC) in Central, the main business district, on Hong Kong Island. Investors, bankers, fashionistas and filmmakers speed-walk to their power breakfasts as recent grads ride elevators tens of stories up to recruitment wings at Deutsche Bank, J.P. Morgan and megastore Lane Crawford, all decorated with millions of dollars in emerging Asian art. Hong Kong is a boomtown, and its pulse is still racing from the night before.
In a year when Hong Kong IPOs have already raised a record $12.8 billion, almost double what was raised for the same period the year before, Chinese cash is moving across the border at warp speed, driving spending up more than 30 percent. Low interest rates in the United States have meant free money for Hong Kong, whose currency is pegged to the U.S. dollar. In fact, the government here has amassed such a sizable foreign reserve that this fall it will begin distributing 6,000 Hong Kong dollar (HKD) payouts, roughly the equivalent of $770, to every adult permanent resident.
“Because it has the least interference from government in the maximum market, Hong Kong has always been uniquely successful,” says Sir David Tang, creator of the Chinese-chic fashion label Shanghai Tang. “Mainland China has been chiefly responsible for the boom,” he continues, noting a tenfold increase in Chinese tourism in the last ten years. “Without China, Hong Kong would’ve collapsed.” At first, the Chinese takeover in 1997 caused fears of tightened government regulations, which led to a mass exodus of expats, but the aftermath has had the opposite effect and driven the economy full-steam ahead. (As one of China’s two “special administrative regions,” or SARs—the other is Macao—Hong Kong is guaranteed a certain degree of economic and political independence from its sovereign to the north, at least until 2047.) “IPO tourism,” in which companies from all over the world go public in Hong Kong to capitalize Chinese investment, brand exposure and possible higher valuation, has turned this 426-square-mile city-state, with a population of just over seven million, into an international playground. And while Hong Kong has always been a financial capital, China’s exponential growth in the past two years has catapulted the city into overdrive.
According to Michael Fung, chairman of the J.P. Morgan Private Bank in Asia, this is just the beginning. In a conference room on the 27th floor of Chater House, an office tower in Central where many banks and investment firms are based, Fung describes the new “incubating wealth” his company is now positioning itself to serve. “We’re finding that with the emerging wealth in Asia, there are many clients whose actual worth may be hundreds of millions, but they’ve reinvested it in hotels, coal mines and factories, so their liquid worth is only a few million,” he says. “But this incubating wealth will be important, because one day their companies will IPO.” It is this group of Chinese millionaires and billionaires who are only now beginning to travel and spend in Hong Kong. “They’re starting to taste a bit of their own success and wealth.”
At the moment, it’s real estate that is making headlines. Seated in the living room at his home on Victoria Peak, or “The Peak,” as it’s known locally, Tang mentions that a business associate called just that morning to say he’d bought a $120 million piece of property on the leafy southern end of the island—in addition to two other mansions nearby—and was planning to tear everything down so that a world-famous architect could build him a house. “I cannot tell you how rich these people are,” says Tang. “They make the Russian oligarchs look like kindergartners.”
Hong Kong’s 40 richest residents are all billionaires, with a combined wealth of $163 billion. (As a comparison, the 40 richest people in China are worth a combined $137 billion.) Many of these billionaires made their money investing in real estate, buying homes like they buy groceries, and prices on Hong Kong Island have skyrocketed. As a result, many young entrepreneurs and financiers have left the city center to enliven empty warehouses in Aberdeen, 20 minutes south of Central, by turning them into shops and homes. Or they’ve moved to up-and-coming areas like gentrifying Sheung Wan, a short walk northwest of Central, where old coffin shops coexist with new, minimally designed galleries. “Nothing’s quite what it seems here,” says Grant Thatcher, founder of the Luxe Guides, who works off Hollywood Road, Sheung Wan’s main drag. “There’s a veneer of glitz and glamour, glitter and glass, but it still retains all sorts of wonderful subtleties and a vintage flavor.” Across the harbor, even Kowloon, the sprawling tourist mecca formerly known as “the dark side,” is getting a facelift. There, above the electronics and fabric stalls of the Sham Shui Po district, looms the gleaming ICC. On the 118th floor, bankers and tourists alike eat Asian tapas at the new Ritz-Carlton’s Ozone, the highest bar in the world. Two blocks away, among the dim sum and dai pai dong stalls of the Tsim Sha Tsui area, is the world’s cheapest Michelin-starred restaurant, Tim Ho Wan, where tourists and locals alike line up for lunch starting at 10 a.m. It is this very juxtaposition that has come to define the city.
From the passenger side of a helicopter about to land on the roof of The Peninsula hotel, Hong Kong looks like a golden funnel of Asian capital swirling into an exotic cocktail. Even stalwarts like the 83-year-old “Pen” have upped the ante, ferrying guests about in WiFi-equipped Rolls-Royces and Mini Coopers with custom racks for storing shopping bags. In 2005, Mandarin Oriental saw fit to open a second Hong Kong location just blocks from the original; the new Landmark Mandarin now has a concert series featuring musicians like Alicia Keys. At the two-year-old Upper House hotel, it’s not unusual to overhear hip young mainland couples dressed in jeans and T-shirts requesting six bottles of 1980 Châteaux Margaux for their minibars.
And it is the hotels that continue to define the fine-dining landscape. The original Mandarin Oriental on Connaught Road has retained its status as a deal-making institution. Executives from nearby offices congregate there for a breakfast buffet of Asian and Western delicacies. At lunchtime the power scene moves up one floor to the Mandarin Grill + Bar—or 25 floors to Man Wah, where the private rooms have intricate carvings through which other guests can see who has rented them out. It’s part of Hong Kong’s ubiquitous cult of “face,” the idea that social standing is tied to status symbols as much as it is to manners and decorum. “Money and status are part of our society,” says Peninsula general manager and style maven Rainy Chan. “And there is a circle of people who are recognized and lauded for this.” Bankers, gallerists and wine connoisseurs convene across the walkway at Alfie’s, an elegantly modern restaurant in the Prince’s Building, created in partnership with the private Kee Club. At the IFC Mall, vacationers and Hong Kongese alike eat imported cheese at the Four Seasons’ Caprice, and over in Kowloon, tourists enjoy light Cantonese cuisine at The Peninsula’s Spring Moon.
The topic at every table is the arrival of Abercrombie & Fitch, not because of its clothing racks, but because of its rental agreement. By the end of the year, the original and iconic Shanghai Tang store, on Pedder Street, will close to make way for the American teen behemoth, which will pay a staggering $12 million per year for the space. It was a controversy that nearly ripped apart the two Hong Kong dynasties—the Tang and the Fok families—that own the building together. But when cash is king, a 150 percent increase in rent will unseat any tradition, especially in a city whose shoppers engage in what could be termed “extreme shopping.” On Canton Road in Kowloon, customers often wait two hours to get into the Gucci and Prada boutiques. One of the rising stars of retail is Jennifer Woo, the thirtysomething wunderkind who revamped her family’s department store, Lane Crawford, as a younger, chicer version of itself. The store’s IFC branch provides VIPs with their own “platinum suites” where they can shower and rest while personal shoppers bring them clothing and stylists do their hair, makeup and nails.
The increase in wealth has brought new tastes, too. “Ten years ago, Chinese customers’ chief mission as travelers was to shop for conspicuously valuable items, like gold and diamond watches,” says Chan. “Now they are much more about old luxury.” Hong Kong designer Vivienne Tam has seen a 20 percent increase in sales in recent years. “People are going back to their cultural roots,” she says. “And designers are taking traditional designs and integrating them with a contemporary interpretation.”
Along with couture gownmaker Barney Cheng and the other local designers popular with the tai-tais, or ladies who lunch, a new crop of fashion companies has burst onto the scene. Hong Kong native Marisa Zeman, the daughter of Lan Kwai Fong developer Allan Zeman, has started a line of resortwear called Nude Is Rude, and Kotur handbags by Fiona Kotur, an expat New Yorker and former accessories designer at Ralph Lauren, go for nearly $1,000 at retailers like Harrod’s and Neiman Marcus.
A city that was once all about commerce, Hong Kong has rapidly developed a booming contemporary art scene. Internationalgalleries Gagosian and Edouard Malinguehave opened outposts within the lastyear, and London’s White Cube will opennext May. Attendance at the city’s four-year oldart fair, Art HK, grew by 40 percent in2010, and Art Basel recently bought a majoritystake (see “Departures’ Guide to the Hong Kong Art Fair”). “Nowit’s a can’t-miss event for the global art community,”says Nick Simunovic, managingdirector of Gagosian Hong Kong. Before thegallery opened last January, “there were collectorsin Asia who were buying seven-figureartworks from JPEGs,” he says. “All of a sudden,upwardly mobile people from Asia areattending biennales and realizing there’s abig world of art out there.” Former ShanghaiTang creative director Joanne Ooi has openedthe multimedia gallery Ooi Botos, and ClaireHsu-Vuchot, whose husband, Benjamin Vuchot,is Asia-Pacific president of Van Cleef &Arpels,runs the Asia Art Archive, one of theonly comprehensive collections and librariesof contemporary Asian art.
If the art market has raised the city’stemperature, then wine has broken thethermometer. When the governmentdecreased taxes on wine over the course of2008 from 80 percent to 40 percent to zero,the Hong Kong wine market became thehighest grossing in the world. Last fall, aSotheby’s wine auction broke world recordswith total sales of $8.4 million. Bordeauxwas-and is-most in demand: Threebottles of 1869 Château Lafite-Rothschildsold for $230,000 each. As Geordie Willis,business development manager at the HongKong outpost of London wine merchantBerry Bros. & Rudd, notes, “Provenance isincredibly important here.” Willis will soonstart carrying spirits as well, in a nod to thecity’s growing mixology trend.
From the M bar atop the MandarinOriental to the terrace at Sevva, owned byBonnie Gokson-she’s the sister of JoyceMa, whose Joyce boutique was one of thefirst retailers to bring cutting-edge internationaldesigners to Hong Kong in the1970s-the city’s after-work scene is awashin new cocktail combinations. At Lily &Bloom, the AvroKO-designed restaurantand lounge from nightclub owners Jaimeand Benedict Ku that is one of the city’shottest hot spots, the drinks were developedwith the owner of the members-onlybar Milk & Honey, which has outposts inLondonandNew York. Over thin-crust pizza at hotelier and developerYenn Wong’s Sheung Wan restaurant208 Duecento Otto, drinks turn to dinner.Similarly understated gourmet restaurants,like The Pawn, the gastropub owned byWong’s fiancé, restaurateur Alan Lo, are anew phenomenon in Hong Kong and mainlytargeted at expats, who make up 60 percentof the clientele at 208. “The local crowd willonly spend HKD100 to 150 [or $12 to $20]for a meal,” says Wong. “In short, we don’twant them.”
Dinner conversation quickly turns fromthe markets to who is richer than whom towhich head honcho spent $10 million on lapdances in Macao, Asia’s supercharged answerto Las Vegas, where high rollers helicopterto the roof of the Atelier de Joël Robuchon.There, gamblers are barely distracted byshopping or shows, save for sold-out performancesof House of Dancing Water, a sort ofCirque du Soleil on steroids.
Back on Hong Kong Island, the acrobaticsare on the dance floor at Gilbert Yeung’sDragon-I, an India Mahdavi-designed dinnerclub where international DJs regularlyspin for models, artists and those who payfor them. Down the street is Yeung’s yearoldlounge Tazmania Ballroom, where thesounds of pinball machines and Ping-Pongecho in the street below. “Ten years ago,nightlife here was boring,” says Yeung.“Everyone was into karaoke. But since weopened, we’ve made it a Champagne culture.”While it still takes knowing one ofhis 2,000 members, or better still, one ofhis 400 VVIPs, to get into Dragon-I, Yeungfindsthat what makes Hong Kong so desirableis how easy it is to infiltrate. “You canadapt to the city in three months,” he says.“If you know one person, that person willput you in touch with everyone else.”
More than the $5.6 million auction ofAndrew Lloyd Webber’s wine collection inJanuary or the recent $1.8 million sale of astudio apartment in Central, it’s this veryopenness and efficiency that truly surprises.“It’s like summer camp,” says David Legg,head of International Markets at GersonLehrman Group. “But it’s also a place of epicrise and fall, much more so than you see inthe States or London.” The city’s spectaculargrowth has engendered a contagious temperamentto bet it all, when all there is leftto want is more. “People want money andmore money,” says Sir David Tang. “Here,they don’t even want that. They want more,more money.”
The Short List
Landmark Mandarin Rooms start at $475; 15 Queen’s Rd., Central; 852/2132-0188; mandarinoriental.com.
Mandarin Oriental Rooms start at $655; 5 Connaught Rd., Central; 852/2522-0111; mandarinoriental.com.
the Peninsula Rooms start at $640; Salisbury Rd., Tsim Sha Tsui; 852/2920-2888; peninsula.com.
The Upper House Rooms start at $420; Pacific Pl., 88 Queensway; 852/2918-1838; upperhouse.com.
Eat + Drink
208 Duecento Otto 208 Hollywood Rd., Sheung Wan; 852/2549-0208; 208.com.hk.
Alfie’s Prince’s Bldg., 10 Chater Rd., Central; 852/2530-4422.
Dragon-I UG/F, The Centrium, 60 Wyndham St., Central; 852/3110-1222; dragon-i.com.hk.
Lily & Bloom 6/F LKF Tower, 33 Wyndham St., Central; 852/2810-6166; lily-bloom.com.
Sevva 25/F Prince’s Bldg., 10 Chater Rd., Central; 852/2537 1388; sevva.hk.
Tazmania Ballroom 1/F LKF Tower, 33 Wyndham St., Central; 852/2801-5009; tazmaniaballroom.com.
The Pawn 62 Johnston Rd., Wan Chai; 852/2866-3444; thepawn.com.hk.
Tim Ho Wan Taui Yuen Mansion, shop 8, 2–20 Kwong Wa St., Mong Kok; 852/2332-2896.
See + Shop
Berrys’ Fine Wine Reserve Prince’s Bldg., 10 Chater Rd., Central; bbr.com.hk.
Gagosian Gallery 7/F Pedder Bldg., 12 Pedder St., Central; gagosian.com.
Lane Crawford IFC Mall, 8 Finance St., Central; lanecrawford.com.
Ooi Botos Gallery By appointment only; 852/6685-3147; ooibotos.com.