CSI Properties Said Close to Buying Kowloon Commercial Tower for HK$2.5B

CSI Properties is reportedly close to acquiring a commercial building in the Jordan area of southern Kowloon, Hong Kong for HK$2.45 billion ($312 million).

The Hong Kong-based developer operated by Mico Chung Cho-yee is locked in exclusive talks to buy the Everest Building at 241-243 Nathan Road, in the bustling commercial district, according to sources familiar with the potential transaction who spoke with Mingtiandi. An account in the Hong Kong Economic Journal reported last week that the deal was already concluded.

The reported transaction is said to follow a number of other attempted sales of the nearly six-decade-old asset that have fallen through in the past year. Hong Kong-listed CSI has not made any announcement concerning a potential transaction to the stock exchange, and did not reply to a request for comment from Mingtiandi by the time of publication.

The deal for the 60,798 square foot (5,648 square metre) tower comes as plans for a high-speed rail terminus in west Kowloon continue to boost interest in real estate in Jordan and its neighbour, Tsim Sha Tsui.

Everest Building Sold After Eight Months

The reported sale of the Everest Building comes after two groups of investors pulled out from purchasing the property, according to local media reports.

The seller, the family of philanthropist Au Shue Hung, has had the 1960s-era commercial building on the market since last year. In July, the family was reported to be in talks with a consortium to dispose of the property for HK$2.78 billion ($354 million). Two months later, the asset was reportedly close to being sold to an unidentified buyer for HK$2.2 billion ($280 million).

The Au family purchased the property for HK$3.6 million in 1960. The reported sale price of HK$2.45 billion, or HK$40,297 ($5,134) per square foot, would represent a gain of over HK$2 billion for the family. Hong Kong property agency Midland is reportedly representing the seller in the transaction.

The 16-storey building’s ground floor and basement consist of retail space leased to Bank of East Asia and jewellery retailer Chow Tai Fook, which is paying a monthly rent of HK$2.5 million. The upper floors are offices.

CSI Breaks Central Streak with Kowloon Deal

The Jordan deal comes two months after CSI Properties raised HK$2.02 billion ($256 million) by selling an 11,700 square foot (1,087 square metre) site in Central to Richard Li’s Pacific Century Premium Developments (PCPD).

Last October, the 14-year-old developer teamed up with Wing Tai Properties to pay a reported HK$11.6 billion ($1.49 billion) for the rights to develop the Peel and Graham Street site in Central.

The developer, which declared total assets of HK$23 billion as of March 2017, also purchased 18 office floors, ground-floor shops and the rooftop of the Oriental Crystal Commercial Building on Lyndhurst Terrace in Central for HK$700 million at the end of 2016.

Express Rail Effect Gives Jordan Building a Lift

Located north of Kowloon’s commercial hub Tsim Sha Tsui, Jordan is a 15-minute walk from the Hong Kong terminus of the Express Rail Link connecting Kowloon to mainland China. The high-speed railway is expected to be opened to passengers next year, drawing more visitors to the district.

Owners of properties in Jordan, located within Yau Tsim Mong district, are already benefitting from the express rail effect. This week, the Shamrock Hotel located just a stone’s throw away from the Jordan MTR station was put on the market. The 108,684 square foot (10,097 square metre) hotel is valued at HK$3 billion ($382 million).