Hong Kong commercial landmarks fetch record sale prices

November 13, 2015 14:25
Mass Mutual Tower in Wan Chai (left) and One Harbour Gate West office tower (right) have changed hands at record prices. Photos: Chinanew.com, HKEJ

Mainland investors have snapped up two Hong Kong landmarks, paying record prices for both.

Evergrande Real Estate Group paid HK$12.5 billion (US$1.61 billion) for Mass Mutual Tower in Wan Chai owned by tycoon Joseph Lau's Chinese Estate Holdings Ltd.

China Life Insurance (Overseas) Co. (CLIO) bagged Wheelock and Co.'s One Harbour Gate West office tower and retail premises in Hung Hom for HK$5.85 billion.

The Mass Mutual Tower deal broke the record for price per square foot (HK$36,232), eclipsing the HK$35,000 set by Hopewell Holdings when it sold a floor at 9 Queen's Road Central in May.     

Evergrande, which beat two Chinese state firms, will pay HK$1.25 billion up front, also a record for lump sum payment, and the remainder over the next six years.

Chinese Estates acquired part of Mass Mutual Tower in 1987 for HK$60 million and the rest in 1991 for HK$500 million.

That implies a 20-fold increase in the 28 years Chinese Estates held the property.

It was Chinese Estates' second property sale to Evergrande this year after it offloaded an asset in Chongqing for HK$1.75 billion.

Wheelock's One Harbour Gate deal is the largest single office tower sale in Kowloon district.

The property, which covers 393,000 sq. ft. of gross area, fetched a unit price of HK$14,885.

The building is under construction and will be completed in 2016.

CLIO deputy chairman and president Liu Anlin said the deal shows China Life Group’s confidence in the Hong Kong market.

Meanwhile, Swire Properties Ltd. is expected to sell a commercial building in Wang Chiu Road in Kowloon Bay for more than HK$7.8 billion anytime soon.

The price works out to HK$15,000 per square foot.

Eddie Hui, a professor in the Hong Kong Polytechnic University, said mainland investors have been seeking investment opportunities worldwide to solidify their income.

Hong Kong is their favorite target, partly due to its investment environment which is more similar to that in the mainland than in the West, he said.

-- Contact us at [email protected]