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"Love alone does not make a living" A glimpse into PropTech development from Jumbo Kingdom Fiasco

With the Jumbo Kingdom - Floating Restaurant, which has been with Hong Kong people for more than half a century, leaving quietly in the rain and then in an accident near the Xisha Islands, now in a state of half-floating and half-sinking. The fate of this ship, which carries the memories and history of Hong Kong, is still unknown. Undoubtedly, the Jumbo Kingdom is a testimony to the development of Aberdeen's watermen and the glorious history of Hong Kong's gradually forgotten fishing village era.

However, the feeling of reluctance is not worth anything, this boat with the traces of fishing village history and culture is finally unable to compete with the reality - the high maintenance costs. It is reported that floating seafood restaurant has accumulated a loss of more than 100 million HKD, and a comprehensive repair need to be carried out every three years, involving 6 million HKD, the maintenance costs alone, has deterred many organizations from taking over the project.

More disappointingly, the AAB member and former president of the Hong Kong Institute of Surveyors also viewed the incident from an operational perspective, saying that the seafood dinghy was "too young" and that the originality of the replica palace-style building was not very authentic.

There is no doubt that the high cost of property management has always been a stumbling block to real estate investment, but, in today's technologically advanced world, does everything have to be labelled as "impossible"?

As a matter of fact, the value of Jumbo Floating Boat is not visible in the books.

Under current accounting standards, a company's intrinsically generated intangible assets are not reflected on the balance sheet, and the value of intangible assets owned by the company is only reflected through "purchase price allocation" during a merger or acquisition. The Jumbo Kingdom is full of Hong Kong people's sentiments and the history of bringing Hong Kong culture to the international stage, and it has been the setting for many international movies.

Intangible assets are the driver of a company's income, and sentiment alone cannot make a living, but when combined with technology, the impossible can always be made possible. As technology of all kinds matures, PropTech is quietly rewriting the definition of real estate. For example, the art collective TeamLab is rewriting the definition of art museums with visual magic, breaking the box of high property management costs with Immersive Experience, and creating an emerging commercial and entertainment property through projection technology.

For example, the recent critically acclaimed movie "Everything Everywhere All at Once" starring Michelle Yeoh, was once delayed due to the severity of the pandemic, and the actors could not film together in the same place due to different quarantine policies. Therefore, the director used Zoom to connect the crew from the globe and filmed by remote. While we are still stuck in a TV city where we need a large space to produce a soap opera every night, the filming anywhere model is already well established on the international stage.

In Hong Kong, property prices have always been so high that owners make a fortune by speculation alone, and this has hindered the development of PropTech. However, with more creativity, capital gains and conservation can actually coexist, and the economic benefits of sentimental conservation are bigger and less shallow than you thought.

When today's technology can bring back the idols that have passed away to sing on stage, the treasured Jumbo Kingdom that have left can surely come back in a way that we cannot imagine in the future.

By Stella Law, Executive Director of CHFT Advisory and Appraisal Limited


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