Phoenix Buys Three HK Shopping Centres From Wheelock for HK$3.38B

Blue chip Hong Kong developer Wheelock and Co has sold a trio of retail properties in the city’s Tseung Kwan O area to private equity fund manager Phoenix Property Investors for HK$3.38 billion ($432 million), according to an announcement issued by Wheelock late on Friday.

The set of three community retail centres include Capri at 33 Tong Yin Street, Savannah at 3 Chi Shin Street, and Monterey at 23 Tong Chun Street, totaling 300,000 square feet and are located in a set of three adjoining residential projects under the Hong Kong-listed developer’s O South portfolio in northwest Kowloon.

Phoenix’s acquisition is the latest private equity investment in Hong Kong community retail assets after Gaw Capital Partners acquired 17 Hong Kong retail properties from Link REIT for a total consideration of HK$23 billion last November.

Buying Malls as Soon as the Homes are Sold

Phoenix is buying the shopping centre assets as Wheelock’s O’South set of projects head toward completion.

“The properties’ distinctive design is strengthened further by its location in a rapidly maturing premium residential district amidst some of the most important new infrastructure projects and government-led investments in Hong Kong,” said Samuel Chu, Phoenix managing partner and chief investment officer in the statement.

The three retail centres, Capri Place, Savannah Place, and Monterey Place form the commercial element of a set of three adjoining residential communities. With a total GFA of around 300,000 square feet (27,870 square metres), Phoenix property paid a unit price of HK$11,266 per square foot for the shopping centres.

Apartments at Capri, finished in 2015, and Savannah, completed in January 2018 have been sold out, while sales at the Monterey are slated to open soon. Wheelock Properties chairman Stewart Leung Chi-kin noted that, “it is anticipated that the O’South Retail Portfolio will become the regional landmark retail malls.”

Phoenix Investing in the City

The Tseung Kwan O acquisition is the second purchase of an asset in a retail podium this year for Phoenix which is helmed by financiers Benjamin Lee and Samuel Chu.

This February, the Hong Kong-based real estate firm reportedly invested HK$442 million to purchase commercial space in the lower floors of the V Heun Building, an office tower on Queen’s Road in Central.

The Queen’s Road acquisition came after Phoenix had sold commercial assets in Kowloon East and Wanchai during late 2017 for a combined HK$322 million.

Community Retail Gains Fans

Phoenix’ turn towards community retail came after some of its competitors had already grown interested in becoming landlords for the only convenience store or hotpot restaurant in Hong Kong residential communities.

Gaw Capital Partners made its biggest acquisition ever last November as it joined with Goldman Sachs to acquire 17 retail properties located within housing communities or near transit from  Link Asset Management for HK$23 billion.

Another Hong Kong real estate fund manager, Pamfleet, acquired an 80,000 square foot commercial podium in Kowloon East’s Harbourfront Landmark complex in Whampoa this June.

Wheelock Brings in HK$28B in Tseung Kwan O

Upon completion of the transaction with Phoenix, Wheelock and Company will have reaped approximately HK$28 billion from property sales in Hong Kong this year, breaking a record for sales in the first ten months of any year since the developer was founded in 1857.

In addition to its O’South projects, the developer chaired by Douglas Woo has also achieved strong sales in Lohas Park. According to media reports in March, all 750 units at Wheelock’s Malibu complex in Lohas Park were sold within a single weekend in March.

The company also has been selling homes at its Oasis Kai Tak apartment in Kowloon East since September last year.