Store Friendly unveils new HK$7.9m wine storage unit in Hong Kong
Kevin Chan, chairman of self storage company Store Friendly, tells Rebecca Lo why Hong Kong’s perfect storm of tiny homes, expensive real estate and collector mentality prompted him to launch a new wine cellar in Lai Chi Kok.
A grey 1 August did little to dampen the festive atmosphere at the opening ceremony of Store Friendly Lai Chi Kok (SFLCK) in Hong Kong. Along with the traditional ribbon-cutting ceremony, an energetic lion dance made its way throughout the 12-storey building with a stop at Store Friendly’s freshly-minted wine cellar.
The floor dedicated to wine storage was renovated to the tune of HK$7.85 million (£750,000), a price tag that yielded 177 units available for rent starting at HK$1,288 (£142) per month for a half unit of eight square metres.
Kevin Chan, chairman of Store Friendly, admitted that its wine cellar was an add-on to his main business of self-storage warehouses, but that the space carries a premium price tag.
“Wine storage is around 2% of our portfolio,” he stated. “It’s like offering first class on an airplane. We tend to charge 30-40% more for cellar rental than regular storage rates.”
For that extra cost, Store Friendly’s wine cellar offers 24/7 temperature and humidity control; shock resistant floors made from eco-friendly materials; and an automated IoT lighting system. Wine merchants make up 60% of the new cellar’s customer base.
While at school in Toronto, Chan noticed its abundance of self-store facilities and felt that his hometown of Hong Kong was the perfect place to transplant the self-store concept. He reasoned that the city had the perfect storm of tiny homes, expensive real estate, collector mentality, plus individuals with the means and appetite for acquiring luxury goods. After he opened the first Store Friendly in Tsuen Wan in 2002, a gap in the wine cellar market became apparent.
“Only 4% of people who buy fine wine store it properly,” Chan said. “At the same time, the biggest hesitation for Hong Kong people when it comes to premium wine purchase is storage.”
Hong Kong’s sub-tropical climate presents further challenges for storing wine at home or in warehouses. Chan has penetrated the local market by converting former industrial buildings into stores to reach a wide demographic. Today, Store Friendly buildings can be found on Hong Kong island, Kowloon and the New Territories.
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Its business model has facilitated expansion to Macau, Taiwan and Singapore, though the wine cellar remains niche with a single Singapore location. The new wine cellar at SFLCK joined its counterparts in Kwun Tong (opened in 2012) and Tsuen Wan (opened in 2009).
Each time Chan opens a new wine cellar, he improves upon the last one. “My first attempt at wine storage was a massive fail,” he laughed. “I got the temperatures all wrong and the insulation I put in didn’t work. I was forced to close it down even before it opened because it cost too much to operate.”
Chan then studied how to cellar for a month in Bordeaux, learning from experts there while gleaning insight into what fine wine required to age gracefully. “We opened Tsuen Wan with 80mm of insulation, motion sensor lighting and constant 60-70% humidity,” he said. “We designed tiny holes into each unit to allow for continuous air circulation.”
He was quick to point out that he’s not interested in selling wine. “We provide a platform for others to do their business. Hong Kong is an ideal place for the trade. There is no VAT, no wine tax, and now lower spirits tax. The chance of earthquake is low and we enjoy stable power supply.”
Chan felt that SFLCK was the ideal location to reach a large catchment of business and private customers as Lai Chi Kok is undergoing rapid gentrification. “Anyone can grab a few bottles for an impromptu dinner or tasting event,” he said. “This freedom to pick up cellared reds on the way somewhere means more collectors.”
Another segment of the market Chan hopes to attract is C-suites residing in Hong Kong on long contracts yet living in service apartments with limited storage space. Store Friendly recently collaborated with local developer Sun Hung Kai Properties for its Townplace West Kowloon serviced apartment residents to enjoy discounted cellar rates at SFLCK.
“My dream is for Wine Cellar to allow more people to access their fine wine collection easily and more often.”
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