One of Hong Kong’s most aggressive real estate speculators is making good on a pledge of love for Kowloon East, as Hugo Lam Chi-fung has scooped up a Kwun Tong industrial site for HK$1.6 billion ($204 million).
This latest real estate deal comes just a week after Lam reaped more than HK$1 billion by selling three office floors in the Harbourfront Landmark building in Kowloon City, and the investor says that his new site in Kwun Tong can be converted to commercial use and redeveloped into a new strata-title office according to interviews with the buyer in local media.
Building More Offices in Kwun Tong
Lam is paying the equivalent of HK$6,179 per square foot of gross floor area to buy the property at 41 King Yip Street in Kwun Tong from Michael Ying, the founder of fashion group Esprit Holdings. Lam plans to develop the 22,000 square foot (2,044 square metre) vacant site into a grade A office tower spanning 263,000 square feet, he told Oriental Daily.
The project is expected to complete in three and a half years and the property may be sold on a floor-by-floor basis, Lam noted. The owner of the site can convert its use to commercial upon paying a premium to the government.
The Kwun Tong area, which is located along Victoria Harbour near the site of Hong Kong’s former Kai Tak airport has been growing in popularity among office tenants and developers as prices rise in Central.
In January of this year real estate fund manager Angelo, Gordon & Co and the family behind the Chellaram trading and transport firm paid HK$2.5 billion for nine floors in an office building in the Kwun Tong area, and in October last year developer Wharf sold a waterfront office tower project in the same area to mainland developer LVGEM for HK$9 billion in one of the largest office transactions in Hong Kong last year.
Veteran Investor Targets Kowloon East
Lam’s Kwun Tong deal comes after the investor had previously confessed plans to allocate HK$7 to HK$8 billion for the acquisition of industrial and office properties this year, especially industrial buildings in Kowloon East and office towers on Hong Kong Island. Lam told Oriental Daily that he is optimistic on the development of Kowloon East as prices for office space in core business districts have reached a very high level of HK$40,000 to HK$50,000 per square foot.
According to property consultancy Savills, which brokered the sale, the Kwun Tong site is set to benefit from the government’s development plan for Kowloon East, a rising commercial district within the Kowloon area. The Central Kowloon Route will provide better connectivity between the east and central regions of Kowloon upon the highway’s scheduled completion in 2022, shaving 25 minutes off the travel time between the two destinations during peak hours.
Lam Buys Site One Week After Office Sale
The deal for the industrial site comes just a week after Lam sold three office floors in a Kowloon City residential and commercial complex for HK$1.16 billion ($148 million). The properties totalling 77,021 square feet were offloaded at a price of HK$15,034 per square foot.
The prolific investor also snapped up an industrial project at 43-45 Tsun Yip Street in Kwun Tong for HK$960 million with Chan Ping-che, one of the buyers of The Center skyscraper last month.
Described by local media as a veteran property investor, Lam is best known for spending HK$4.3 billion to buy nine shopping malls and some 3,000 parking spaces from Link REIT in a span of three years from 2014. His portfolio includes Tsing Yi’s Cheung Hong Commercial Centre, bought in February 2017 for around HK$1.1 billion.