Angelo, Gordon and Chellarams Buy 9 Floors of Kwun Tong Building For HK$2.5B

Real estate fund manager Angelo, Gordon & Co and the family behind the Chellaram trading and transport firm have recently paid HK$2.5 billion ($320 million) for nine floors in an office building in the Kwun Tong area of Hong Kong’s Kowloon East, according to local media reports.

The New York-based private equity firm and the family office which traces its wealth to the early days of the British empire’s arrival in Asia acquired the 18th to 28th floors in the C-BONS International Centre, as Hong Kong’s office market continues to set global standards for commercial rents and asset values.

Mainland Feminine Hygiene Brand Profits From Hong Kong Office Investment

With each floor measuring 17,300 square feet (1,607 square metres), the new price per square foot for the strata title office assets works out to HK$16,000 ($2,046). Completed in 2010 by Sun Hung Kai Properties, the 26-storey commercial building located at 108 Wai Yip Street has a gross floor area of 292,000 square feet (27,128 square metres).

The seller, Wuhan-based maxi-pad maker and real estate conglomerate C-BONS Holding, had acquired ten floors and naming rights to the building from Sun Hung Kai in 2010 for HK$1 billion.

There is no indication of Sun Hung Kai having required C-BONS to pay a premium for the right to rename the grade A office project after one of China’s most popular feminine hygiene brands.

Including a floor that was sold in 2015 for HK$250 million, the mainland group disposed of the assets for a total of HK$2.8 billion, making a combined profit of HK$1.7 billion.

The transaction at C-BONS International Centre continues a flurry of office activity in Kowloon East, after Wharf Group sold the 8 Bay East waterfront office tower project in Kwun Tong to mainland developer LVGEM for HK$9 billion ($1.2 billion) in October. That transaction was preceded just days earlier by Laws Group winning a tender to redevelop an ageing industrial building in the same area for HK$1.39 billion ($178.1 million), with plans for a landmark commercial complex.

US Private Equity House Teams with HK Family Office

The pair of investors in the newly traded property also worked together in 2016, when Angelo, Gordon bought a 60 percent stake in a mall from the shipping family HK$500 million. The Chellarams had previously paid HK$510 million to pick up the mall, located in Wheelock Properties’ residential project in Tseung Kwan O, the New Territories, in late 2015.

The family of Indian descent is no stranger to the Kowloon East market. In 2014, the Chellarams, who control shipping firm D Chellaram (HK) Limited, sold a floor in Kwun Tong’s Elite Centre for HK$1.1 billion after buying the property for HK$809 million three years earlier, making a profit of HK$29 million.

The deal is Angelo, Gordon’s second Asian transaction in as many months, after the New York-based firm disposed of Metro Tower, a 39,908 square metre commercial centre in Seoul, South Korea for $225 million in December.