Hong Kong's Cyberport tech park still has doubters

HONG KONG (AP) - Tucked in a lush coastal swath of Hong Kong Island, the corporate park that was supposed to become Hong Kong's Silicon Valley projects an image of high-tech progress. 

Two years since Cyberport opened, the development's executives say the 15.8 billion Hong Kong dollar (US$2 billion) project has backed up style with substance. 

But detractors charge it has yet to fulfill its goals, and allege it was simply a real estate venture dressed up as a bid to boost Hong Kong's burgeoning technology sector during the old dot-com boom. 

Cyberport was launched in controversy.  

Hong Kong's government awarded the project - without any bidding - to a company controlled by Richard Li, a son of the territory's richest man, Li Ka-shing. 

Critics argued the deal smacked of cronyism. 

Land is scarce in congested Hong Kong, leading to some of the world's highest property prices, and Cyberport has gone up on a rare prime parcel on the island's south side. 

The real estate side of Cyberport is shaping up nicely.  

A lavish opening for Cyberport's ultra-chic Le Meridien hotel took place Tuesday, its lobby a mix of modernity and Asian tradition. 

Nearby, the park's luxurious Bel-Air residential properties are selling well, marketed on the suggestion of a millionaire lifestyle. 

But critics have a question: What about Cyberport's original stated mission to brighten Hong Kong's future by bolstering its technology sector? 

While U.S. software giant Microsoft has moved in, only two-thirds of the office space already open is occupied.  

And there's more to be opened yet. 

Cyberport's sidewalks still seem eerily empty. Especially considering that the rental rates are a relative bargain at HK$11 to HK$13 (US$1.40 to US$1.70) per square foot, said real estate agent Kelvin Ho of Centraline Property Agents Ltd. 

Corporate governance activist David Webb said the amount of Cyberport's acreage devoted to residential development made clear its nature as a real estate venture from the outset. 

Cyberport Chief Executive Officer Nicholas Yang said Tuesday that time will prove the doubters wrong. 

"If you ask for results in two to three years, that's a little shortsighted,'' Yang told reporters at the hotel opening. 

"Judging success by looking at the occupancy rate is a big mistake.'' 

"Look at how long it took for Silicon Valley. Did people judge whether it was successful three years later?'' he said. 

Cyberport spokeswoman Rennie Kan said the development was planned as a "community,'' including real estate, although technology remained the top priority. 

Kan noted that tenants are chosen to fit Cyberport's strategic focus on digital media technology. 

Perceptions that the residential side is gaining ground faster than the tech development are inevitable because of the aggressive advertising needed for Hong Kong real-estate marketing, she said. 

"In the end, companies do have to come here and set up their offices,'' Kan said. 

Controversy was sparked as soon as the government awarded its development rights in 1999 to Pacific Century CyberWorks, a tech-and-telecom company controlled by Richard Li that's now known as PCCW. 

PCCW was once envisioned as a regional powerhouse that would use its stable telephone revenues to fund potentially lucrative high-tech ventures, but the plan fizzled amid the dot-com bust. 

Now, critics say their suspicions about Cyberport are underscored by PCCW's plans to transfer the assets into a small gas company whose focus is being shifted to real estate. 

PCCW spokeswoman Joan Wagner declined comment on the spinoff. 

Although Bel-Air residential sales of HK$4.11 billion (US$527 million) last year helped PCCW revenue grow by 12 percent, the company still posted a net loss of HK$6.1 billion (US$782 million). 

Critics say Cyberport doesn't fit with Hong Kong's attempts to reshape itself as a value-added economy - which many agree must come from entrepreneurial initiative, not government. 

"Hong Kong's strength is not government-engineered new industries,'' said economist Dong Tao at investment bank Credit Suisse First Boston. - AP 

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