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Hong Kong Builders Embrace Art, Design

Architects say developers used to ask them to maximize floor area, but now request more flair

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The sandstone-and-glass residential building Opus Hong Kong, designed by Frank Gehry, was completed in 2012 and reversed decades of cookie-cutter construction.

BOBBY YIP/REUTERS
The sandstone-and-glass residential building Opus Hong Kong, designed by Frank Gehry, was completed in 2012 and reversed decades of cookie-cutter construction.
BOBBY YIP/REUTERS

HONG KONG—Hong Kong real-estate developers are turning to art and design to differentiate themselves in a crowded market.

Here among high-rise offices and luxury-goods retailers, the city’s first commercial building dedicated to exhibiting art is being built in its Central business district. A few miles away, a new luxury residential complex has been meticulously curated by a billionaire property tycoon.

Architects in the city say that developers used to ask them to maximize floor area, but now request more flair in design and furnishings.

“Developers are trying something special because they have to get creative in order to attract new customers,” said Angel Law, head of residential investment at DTZ Cushman & Wakefield in Hong Kong. This includes using new color schemes, layouts and furnishings that are “different from the square boxes that used to sell,” she said.

The trend, which began with Opus Hong Kong, an apartment building designed by Frank Gehry that featured twisting sides and curved facades completed in 2012, reverses decades of cookie-cutter construction based more on utility than artistry.

Tightly packed Hong Kong consistently ranks among the world’s most expensive cities in which to live and work. In 2016, for the sixth year in a row, research firm Demographia ranked Hong Kong the least affordable city for housing in the world.

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Property prices here have nearly doubled since 2003, according to UBS, which ranks Hong Kong property second in the world after London for being at risk of being a bubble. A broad slowdown in overall home sales since late last year has left the commercial and luxury real-estate markets largely unscathed, because demand outpaces supply in both segments, according to analysts.

A commercial skyscraper would have been a natural choice for developer Henderson Land Development Co. for its plot of land in the middle of the Central business district. Rents on grade-A offices in the district rose 11% in the first quarter from a year earlier, according to property consultancy Knight Frank. Office vacancy in the first quarter was as low as 2.2%, according to real-estate firm Savills.

Yet local architect William Lim proposed to build an art building rather than another office building that, he said, would add little value to the district.

“We recognized there aren’t any buildings purpose-built for art. We felt there was a need to address this,” said Kristine Li, assistant general manager of portfolio leasing at Henderson. The developer saw an “opportunity to offer something unique,” she said.

The 24-story building, set to open in 2017, will feature high ceilings, an external gondola and facades that can open up to move works of art onto each floor. Called HQueen’s, it mainly will house art galleries, along with some shops and restaurants.

Adrian Cheng, executive director of New World Development Co. and founder of K11 Art Foundation, already enjoyed success mixing art and retail in his K11 art malls in Hong Kong and Shanghai when he ventured into curating his first residential complex, Pavilia Hill, a few miles from the business district.

That apartment complex near busy Causeway Bay district is filled with sculptures and paintings handpicked by Mr. Cheng.

It is marketed under the “Artisanal Movement,” which, according to Mr. Cheng, celebrates craftsmanship and nature. The complex includes stones flown in from Japan, a traditional Japanese bathhouse, teahouse, a meditation corner and a Zen garden.

“Instead of just hiring a big designer or a big architect, we treat every object, and the entire space like an exhibition, a museum that we curate,” Mr. Cheng said.

The turn to art in real estate is in part market-driven. Awareness of and exposure to art has flourished since Art Basel, one of the world’s largest art fairs, picked Hong Kong as its Asian base in 2013, bringing in droves of well-heeled collectors and fans to the city every year.

Underscoring the integration of art in real estate is the success of Swire Properties’ Opus, Mr. Gehry’s first foray into Asia.

The 12-story apartment tower has 270-degree views of Victoria Harbour from on top of the exclusive Victoria Peak and is considered by many to be a work of art in itself, analysts said. All 12 homes in the building were sold, with the most expensive going for $65.6 million, or $12,355 a square foot.

It remains to be seen whether promoting art and design will be a long-term, industrywide movement but, in the short term, more developers are embracing the idea.

“It is perhaps a sign that the market is increasingly both more competitive and more discriminating,” Peter Cookson Smith, president of the Hong Kong Institute of Urban Design, said of the recent use of art in real estate.

Write to Anjie Zheng at Anjie.Zheng@wsj.com

Write to Fang Block at fang.block@dowjones.com

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