Best Mart 360 Boss Marketing Causeway Bay Building After Cutting Price 54%

Mainland property investor Lin Tsz-Fung is marketing a commercial building in Hong Kong’s Causeway Bay area at less than half of what he was seeking for the property six years ago.

Lin, a co-founder of HKEX-listed retailer Best Mart 360 who also goes by the name of Hugo Lam Chi-Fung, is seeking HK$600 million ($77 million) for the L’Hart tower on Lockhart Road. The investor had tried unsuccessfully to sell the 26-storey ginza-style building for HK$1.3 billion in 2018, according to announcements by Savills at the time.

Savills, which is also managing this latest sale effort, pointed to the asset as offering upside to buyers able to bring the property in what is traditionally Hong Kong’s busiest retail hub closer to full occupancy.

“The asking price for the property is HK$600 million, with a current occupancy rate exceeding 75 percent,” Peter Yuen, managing director of investment at Savills Hong Kong said in a release. “The quality of the tenant mix is high, and it is expected that once fully leased, the monthly rental income will be around HK$1.5 million, providing buyers with stable immediate rental income. Additionally, being situated in a prime retail area in Causeway Bay is expected to attract investor interest.”

From Buyer to Seller

Situated opposite the Causeway Bay MTR station at 487-489 Lockhart Road, L’Hart has a gross floor area of 32,681 square feet (3,036 square metres), with Lin asking the equivalent of HK$18,359 per square foot for the property. The 1998-vintage building is being sold with existing tenancies, which mainly comprise restaurants and beauty shops, according to Savills.

Tenants of the building include Japanese restaurants Kyoto Oden Masa and Minori Omakase, Hansum shisha bar, Refinery beauty salon, and Grill Thai restaurant.

Lin had acquired the property from HKEX-listed property investment firm Henry Group Holdings (now Zhongchang International Holdings) in 2017 for HK$965 million.

The investor had been a prolific buyer of Hong Kong real estate before he began disposing of assets amid the city’s property slump, including selling the Wan Tau Tong Square shopping complex in Tai Po to a unit of state-backed China Resources Group in June 2022.

Two months after that disposal, Lin and another Best Mart 360 co-founder agreed to sell a 49 percent stake in the snack retailer to a subsidiary of state-owned conglomerate China Merchants Group. Lin retained a 13 percent stake in Best Mart 360 as of 30 June and continues to be an executive director of the company.

Lin is marketing the Causeway Bay asset after capital values for high street shops in Hong Kong plunged 49 percent from their 2014 peak through 30 June, according to a July report by JLL, as sluggish consumer spending and a tepid tourism recovery have weighed on retail sales. High street shop rents have plummeted 37.8 percent from the onset of the pandemic through the end of June, according to the consultancy.

Investors Feel the Squeeze

L’Hart joins a raft of properties being put up for sale in recent years by veteran Hong Kong property investors or receivers that have seized assets on behalf of creditors.

Last month, smartphone touchscreen tycoon Yeung Kin-Man acquired the Camelpaint Centre commercial block in Kwun Tong from receivers who had taken over the property among a wave of seizures from the family of the late “Shop King” Tang Shing-Bor.

Assets owned by the Tang family or by their former creditors that have been put up for sale in recent months include the 199-key Hotel Ease – Mong Kok, the Riviera Plaza shopping mall in Tsuen Wan, a set of five industrial buildings in Sai Kung, the T-Plus retail podium in Tuen Mun, and a residential block in Yau Ma Tei.

That same month, the “King of Cassettes” David Chan Ping-Chi put up for tender a commercial building at 321 Java Road in North Point at a price said to be as much as 44 percent below what he was asking for the property four years ago.

In August, Chan sold his remaining two floors in The Center for HK$1.3 billion after valuations for space in the 73-storey office tower plummeted by more than half since 2017. Chan and Lin  were part of a consortium of mainland and Hong Kong investors who collectively acquired 75 percent of the space in the skyscraper from CK Asset in late 2017, with the pair having sold their joint interests in floors 38 and 39 in 2019.

That consortium had also included the late “Minibus King” Ma Ah-Muk, whose family in August put up for sale the 93-key Eco Tree Hotel in Sai Ying Pun. Other asset sales by Ma since 2020 include the 20th floor at The Center, a Tsim Sha Tsui commercial building, a Kwun Tong industrial block, and a floor in the China Merchants Building of the Shun Tak, as well as various street shops and car parks across the city.