China Shipbuilding Sets Price Record in HK$259M West Kowloon Office Buy

Wei Shenyi of First Group (2nd left) shakes hands with Meng Xiangkai from CSIC at the naming ceremony (Image: HKET.com)

Mainland conglomerate China Shipbuilding Industry Corporation (CSIC) set a new price record for Hong Kong’s West Kowloon area recently with its HK$259 million ($33.2 million) purchase of the two top floors of an office building, along with naming rights for the soon-to-be-completed project.

The state-run shipbuilding giant bought the 23rd and 25th floors of 650 Cheung Sha Wan Road from local developer First Group Holdings for HK$259 million ($33.3 million). (The building has no 24th floor, but that’s another storey). The transaction broke the per square foot price record for commercial buildings in West Kowloon.

CSIC paid around HK$19,000 per square foot for the new space, plus the right to rebrand the 21,000 square metre (225,000 square foot) building as China Shipbuilding Tower. The company plans to use the tower as their headquarters in Hong Kong, and the name was officially changed at a ceremony last month.

Over 90 units in the building near the Lai Chi Kok station on the MTR’s Tsuen Wan Line have already been sold, according to First Group director Wei Shenyi.

The office proejct 650 Cheung Sha Wan road is expected to be finished next year

Mainlanders Taking Up More Space in Hong Kong

CSIC’s purchase in West Kowloon is part of a larger trend of mainland Chinese investors and tenants taking up space in Hong Kong’s office market, according to analysts studying the phenomena.

According to a recent report from Colliers International, mainland buyers accounted for a record $5.32 billion of investment into Hong Kong property last year, up from just $3.31 billion in 2015.

Mainland corporates have become the fastest growing group of office tenants, and the number of mainland companies in Hong Kong has increased by double digits between 2012 and 2016.