The world’s most expensive real estate market never stops moving and in this week’s roundup of Hong Kong stories, we bring you all the events that didn’t make its way into Mingtiandi’s breaking news coverage last week. We lead the way with a local developer’s plan for a new project in the under-loved North Point area, and a record high price for a B grade asset in Central. All these stories and more await you below.
Hong Kong-listed developer Hang Lung Properties is upping its investments in its home market with a plan to invest HK$2.56 billion ($326 million) for a new commercial project on Electric Road in North Point.
The developer of Shanghai’s Plaza 66, which has seen its subsequent mainland commercial ventures struggle in recent years, has formed a joint venture with its parent company Hung Lung Group to redevelop a set of eight buildings in the neighbourhood into a new 105,000 square foot (9,754 square metre) project. Read more>>
A local investor sold a whole floor in the Euro Trade Centre on Connaught Road in Central traded for HK$200 million on April 8th. The transaction sets a record high price of HK$39,500 per square foot for an asset in the Grade B commercial building, according to an account in the Hong Kong Economic Times.
The trade of the floor, which is said to be in the high zone of the building, was done by company share transfer, earning the seller, a private investor named Lai Kam-yuen, a capital gain of HK$172 million or a 4.8 times return on the HK$3.58 million he paid to purchase the property fourteen years ago. The sale marked a 20 percent premium over the HK$33,000 per square foot recorded in the most recent transaction in the building, in June last year. Read more>>
New World Development is one step closer to putting the whole Hankow Apartments building into its pocket after it purchased a shopfront in the building in Tsim Sha Tsui earlier this month.
The Hong Kong-listed developer on April 2nd paid HK$78 million for the 210 square foot shop, which works out to a price per square foot of HK$371,000, to acquire its latest piece of the building on Hankow Road, near Haiphong Road according to the Hong Kong Economic Times.
Although the New World paid a 26 percent premium over the price per square foot paid for a similar shop in May last year, the acquisition is thought to put its ownership beyond the 80 percent of the property necessary to trigger a compulsory sale. Should the Hankow Road site be redeveloped, it could yield 93,600 square feet of floor space. Read more>>
An unidentified buyer, said to be related to a local foot massage operator, on April 9th purchased a 400 square foot shopfront in Causeway Bay at HK$66 million ($8.41 million) for her own investment, according to the Hong Kong Economic Times.
The shop on Jardine’s Baazar, a road connecting the main avenues Causeway Bay avenues of Hennessy Road, Yee Wo Street and Lockhart Road, is currently leased to a pharmacy with a rent of HK$82,000 each month.
The buyer paid the equivalent of HK$165,000 per square foot for the shop, with the seller, who originally purchased the property in 1994 for HK$17.5 million, having achieved a capital gain of 3.8 times over their original purchase price. Read more>>
Net absorption of Grade A office space rose from negative territory in the last quarter of 2018 to 77,101 square feet in the first quarter of 2019, with leasing in Kowloon East led by the insurance sector, according to a report from Cushman & Wakefield.
Office rents in Central stayed flat during the quarter, which the agency attributed to weak demand for prime offices from mainland firms.
In the retail realm, the agency found that, thanks to the new high speed rail link to Guangzhou, landlords have achieved positive rental growth in areas of Kowloon such as Mongkok and Tsim Sha Tsui. Read more>>
The Hong Kong government’s plan for redeveloping old industrial buildings into new commercial space may see its first beneficiary in Kowloon East, as the Maxwell Industrial Building in Kwun Tong, which the Laws Group purchased in 2017, began demolition last week, according to the South China Morning Post.
Thanks to the revitalisation policy announced by the government last year, developers who convert industrial buildings built before 1987 for commercial use, will be allowed to add 20 percent more floor area to the project. For Laws Group this means an additional 40,000 square feet of space, bringing the redeveloped project to 270,000 square feet. Read more>>