Buyers of The Center Funding $5.2B Deal Via Bonds and More Hong Kong Real Estate Headlines

Leading today’s Hong Kong real estate news, buyers of the world’s most expensive building are confirmed to be selling bonds to institutional investors to fund the HK$40 billion purchase. The innovative bit of financial engineering reduces the number of lenders in the deal, one of the buyers said. Also in the headlines, a local development firm has acquired 95 percent ownership in an industrial site in Tai Kok Tsui for HK$260 million and former Olympian Seb Coe came to town to talk up his new joint bid with Guangzhou R&F for a Kai Tak sports park. All these stories and more await you, if you just keep reading.

Buyers of The Center Sell Bonds to Fund Acquisition

A consortium of property investors led by two Hong Kong tycoons yesterday closed their HK$40.2 billion (US$5.15 billion) takeover of Li Ka-shing’s The Center building via an innovative bit of financial engineering that required them to put up capital equivalent to 20 percent of their purchase.

The buyers sold high-yielding short-term bonds to institutional investors, which let them bypass commercial banks that usually arranged the loans for such purchases. Morgan Stanley Capital Markets and Hammer Capital Partners arranged two tranches of 18-month bonds, providing funding of as much as 80 percent loan-to-acquisition value (LTV), double the 40 percent LTV that applies to senior bank loans sanctioned by the city’s monetary authority. Read more>>

95% Ownership in Tai Kok Tsui Industrial Site Sold For HK$260M

Lofter Group has acquired over 95 percent ownership of four industrial buildings at 100 – 106 Bedford Road in Tai Kok Tsui, west of Mong Kok. The company paid a total of HK$260 million for the 5,850 square foot site, said Centaline Property.

The company plans to develop a new grade A office building on the site. Carol Chow Pui-yin, founder of the Lofter Group said the company might apply for a compulsory sale for the remaining units on the site. Read more>>

Floor in Kwun Tong’s Rykadan Capital Tower Put on Market for HK$168M

The 9th floor in Rykadan Capital Tower at 135  Hoi Bun Road, Kwun Tong is put on the market with a price tag of HK$168 million, according to Centaline Property. The vacant property enjoys a view of the Kai Tak Cruise Terminal.

The asking price of HK$168 million for the 12,029 square foot property works out to be HK$13,966 per square foot. Tender for the asset closes on June 20. Read more>>

Bidder to Developer Kai Tak Sports Park Reveals Plans For The Project

Sebastian Coe says the success of the Kai Tak Sports Park rests on making Hongkongers feel like they have “some skin in the game”, highlighting the way the London Olympic Park engaged students during construction.

Coe is in Hong Kong in his role as executive chairman of CSM Sport & Entertainment, which is partnering with Guangzhou R&F Properties as one of three consortiums bidding for the tender of the HK$32 billion Sports Park. Read more>>

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