The Gaw family’s Pioneer Global Group has sold a commercial building near Hong Kong’s Central district for HK$1 billion ($128.96 million), according to a recent announcement to the Hong Kong stock exchange signed by Pioneer’s managing director, Kenneth Gaw.
The company controlled by the celebrity private equity investment family sold the 24-story Pemberton building in Sheung Wan to a BVI registered company said to be controlled by property investment firm Octa Capital Partners. Hong Kong-based Octa was set up in 2014 by former Shun Tak executive Brian Swing with real estate finance veteran Edward Choy, who formerly served with Noah Private Wealth Management and CDG Retail Management.
The 70,600 square foot (6,559 square metre) Pemberton is located at 22-26 Bonham Strand in Sheung Wan district, just one metro station west of Hong Kong’s traditional downtown in Central. Pioneer had acquired the Pemberton in 2011 for HK$523 million, and the price they received for the asset works out to about HK$14,161 per square foot. The market valuation for the building as of September 2016 was HK$780 million, according to Pioneer Global.
Soaring Hong Kong Market Boosts Value of Commercial Assets
The sale by Pioneer Global capped off one of Hong Kong’s busiest years on record for sales of commercial real estate assets as rising office rents and demand from mainland buyers drove a number of record deals.
In July 2016, Wheelock & Co sold the east block of its One Harbourgate complex in Kowloon to Shenzhen-based Cheung Kei Group for HK$4.5 billion before the building was even occupied. That transaction followed China Everbright’s HK$10 billion purchase of the Dah Sing Financial Centre in Wanchai district in February.
The Pemberton is located just 400 metres from The Center, a 73-storey prime office building on Queen’s Road which super-investor Li Ka-shing’s Cheung Kong Property Holdings put up for sale for a reported HK$35 billion tower last summer.
By disposing of the Sheung Wan building, Pioneer Global recorded a total fair value increase and capital gain of approximately HK$470.2 million, of which HK$220.5 million was already recognised in previous fiscal years and HK$249.7 million shall be reported in the financial year ending 31 March 2017, the statement said.