The chairman of mainland developer CC Land has reportedly teamed up with Hong Kong’s CSI Properties and Asia Standard International Group (ASI) to purchase Nan Fung’s Octa Tower in Kowloon Bay for HK$8 billion ($1 billion).
The mainland-Hong Kong consortium’s apparent purchase of the 28-storey office building was reported late yesterday by the Hong Kong Economic Times, and would qualify as the city’s second-largest real estate deal of 2018. The transaction price translates to a value of HK$10,738 per square foot for the 794,332 square foot (73,796 square metre) building.
Mingtiandi had reported just over one month ago that Nan Fung was on the verge of selling the 2010 vintage tower. Today, CSI Properties did not respond to a request for confirmation by the time of publication.
Fully-Leased Kai Tak Area Tower Changes Hands
Located at 8 Lam Chak Street, Octa Tower is part of the former Kai Tak airport site and is a 15-minute walk from the Ngau Tau Kok MTR station. The office tower is said to be over 90 percent occupied with tenants including Wing Lung Bank and mobile network operator CSL. Average monthly rents at the grade A tower, which boasts a swimming pool, podium garden, and panoramic views of Victoria Harbour, are currently HK$25 per square foot.
The sale of the building is the city’s second-biggest property deal year to date, following Henderson Land’s HK$9.95 billion January disposal of the 18 King Wah Road office building in North Point. That 329,800 square foot office building was sold to a Chinese consortium backed by China Taiping Insurance Group for HK$30,170 per square foot.
ASI and CSI Team Up Again
The Hong Kong portion of the buying consortium for the 136.5 metre-tall building reunites a pair of developers that have previously teamed up both in the city, and in mainland China.
In 2016, ASI and CSI Properties formed a joint venture to develop the Queen’s Gate luxury residential project in Shanghai’s Qingpu district, and in 2012 the investment duo joined forces with the UK’s Grosvenor Group, to undertake a luxury residential project in Hong Kong’s toney Jardine’s Lookout neighbourhood.
CSI Properties also has experience working with Chongqing-based CC Land’s chairman Cheung Chung Kiu after the Hong Kong-listed developer last year sold a plot on Henderson Road in Jardine’s Lookout to the mainland tycoon for a reported HK$600 million.
Kowloon East En Bloc Market Heats Up
The account of the Octa Tower sale was disclosed in the same week that Singapore-based Mapletree Investments was reported to have put its nearby Mapletree Bay Point project on the market for HK$9 billion, amidst a surge of demand for office assets in Hong Kong.
That prospective sale also comes after Nan Fung’s competitors at Wharf Group, a subsidiary of Wheelock, sold their 8 Bay East office tower, which is located opposite Mapletree Bay Point, to mainland developer LVGEM for HK$9 billion ($1.2 billion) last October.
Nan Fung Stays Active in Kowloon East
Despite the sale of the Octa Tower, Nan Fung’s presence in Kowloon East is not diminishing. The privately-held developer is still in the process of completing The Quayside, which is just a five-minute walk from Octa Tower in Kowloon Bay. That 883,897 square foot office property, which Nan Fung is co-developing with Link REIT, is expected to be completed next year at a cost of HK$9.9 billion.
Further up the pipeline, Nan Fung has at least one more commercial project on the way after the developer outbid 11 rivals last year to pay a record HK$24.6 billion ($3.16 billion) for a 204,988 square foot (19,044 square metre) site at the former Kai Tak Airport.