A floor in Central’s World-Wide House, one block away from Hong Kong’s Exchange Square, is reported to be open to tender with an asking price of HK$800 million ($102 million). The seller bought the property in July of last year, and is now aiming for a more than 33 percent profit on the commercial asset, according to an account in the Hong Kong Economic Times.
The 14,448 square foot (1,342 square metre) asset is the 11th floor of the 27-storey grade A commercial building right above the Central MTR station in the city’s business hub. The property is currently leased to Hong Kong-listed beauty salon Modern Beauty, but the contract is due to expire in May.
Seller Shoots for $25M Profit After 7 Months
Watch retailer Prosper One International Holdings, then known by the minty moniker of Tic Tac International Holdings, purchased the floor seven months ago for HK$601 million ($77 million) from COFCO Group’s Joy City Property, according to media reports.
The asset, then reported to cover 16,693 square feet (1,550 square metre) of space, changed hands for the equivalent of HK$36,003 ($4,616) per square foot — setting a new record for the circa-1980 tower at 19 Des Voeux Road. Joy City’s owners had reportedly bought the floor for HK$410 million in 2012 and leased out the space, collecting a steadily growing rental income stream.
Modern Beauty is said to be paying monthly rent of HK$860,000 for the space, generating a 1.7 percent rental yield for Prosper One. Other occupants of World-Wide House include realtor Midland Holdings, Asia Insurance and the Real Estate Developers Association of Hong Kong.
Central’s Rising Rents Could Propel Profits
While the property’s current owner has yet to find a buyer at the new and improved asking price, the prospects of a sale may receive a boost from Hong Kong’s world-leading commercial rental rates.
Thanks largely to demand from mainland tenants, grade A office rents in Central continue to rise according to JLL. The property consultancy forecasts that rents in the business centre will grow by as much as five percent in 2018.