Hong Kong’s Henderson Land Development has added another project site to its land bank in its home city by acquiring the last three units in a building in the New Territories’ Tai Po town.
The blue chip developer recently paid HK$69 million ($8.81 million) for the last three street front shops in the Wah On Building in Tai Po, according to a report in Hong Kong’s Economic Times, giving it full ownership of the 56-year-old property.
The acquisition, which follows one of Henderson’s favoured approaches of buying up individual units in aging buildings, provides the developer with the opportunity to redevelop the 5,000 square foot site currently occupied by the Wah On Building into a 28,550 square foot (2,652 square metre) mixed commercial and residential project.
Paying a 40% Premium to Take Full Control
Henderson paid the equivalent of HK$49,000 per square foot to purchase the three street front shop units, buying the set from a single owner who had purchased them in 1964 for HK$92,000, according to the HKET report.
On a price per square foot basis, the acquisition is said to be around 40 percent over market value for the shops, however, it completes a process which Henderson had commenced last September, when it began acquiring units in the seven-storey building through an agent. The developer paid from HK$11,000 to HK$14,000 per square foot for Wah On Building’s 24 residential units and is estimated to have paid a total of HK$340 million to acquire the property.
At that price, the developer of such projects as the AIA Tower in North Point and the IFC Mall in Central paid approximately HK$11,909 per square foot of built area in a new project to be developed on the site along Mei Sun Lane around 10 minutes walk from the Tai Wo subway station.
Earlier this year, Henderson had acquired two other ground floor shops in the building, which along with having acquired the residential space, gave it ownership of 89.7 percent of the space in the building.
Henderson Adds to Hong Kong Pipeline
Henderson, which last month joined a consortium which successfully acquired a residential site along the former airstrip of Hong Kong’s Kai Tak airport for HK$15.95 billion ($2 billion), has also added a number of new projects to its pipeline this year through piecemeal purchases of aging properties such as the Wah On Building.
In June of this year the company applied to the Hong Kong government for the compulsory sale of four aging buildings in Hong Kong’s Mid-levels which would pave the way for Henderson to redevelop the site along Elgin Street into a new project with a gross floor area of up to 110,000 square feet (10,219 square metres).
Just one month earlier, the company now helmed by Martin and Peter Lee, also bought out the remaining space in a pair of buildings on Whampoa Street and Baker Street in Kowloon’s Hung Hom area through a compulsory sale which valued the addresses at a combined sum of over HK$1.1 billion ($143 million).