A Hong Kong redevelopment specialist has teamed up with a local private equity firm to buy up 57 Kowloon properties in preparation for a HK$1.1 billion ($142 million) mixed-use project, according to an announcement today.
Lofter Group, together with partner Alphalex Capital Management, has achieved its goal of unifying 1-15 Ki Lung Street in the Prince Edward area through the recent acquisition of the final properties in the row. Now the partners have set a goal of building a residential-commercial mixed-use tower on the spot.
Lofter founder and chairwoman Carol Chow said the now unified 7,500 square foot (697 square metre) site could yield a maximum gross floor area of 67,500 square feet for the development.
Known for its redevelopment of industrial assets, Lofter acquired several sites last year as the market swooned, and has put together its project on Ki Lung Street as the city begins to show signs of a real estate revival.
According to property consultancy JLL, which brokered this latest acquisition, the partners paid HK$140 million ($18 million) for 13-15 Ki Lung Street after earlier purchasing all of the titles in 1-7 and 9-11 Ki Lung Street.
The total acquisition price of the entire site is about HK$627 million, which pencils out to HK$9,289 ($1,197) per square foot of built area.
“We are optimistic about the future prospects of the district, and in the next three to five years, driven by the redevelopment of the Water Supplies Department on Sai Yee Street and other redevelopment projects in the area, the entire Yau Tsim Mong District will be under the spotlight and generate huge synergy through integration with the West Kowloon Cultural District,” Chow said.
Buying the Last Pieces
Lofter previously teamed up with Alphalex to buy 1-7 Ki Lung Street from local “Shop King” Tang Shing-bor in a deal announced last November.
Lofter paid HK$347 million for those assets — a more than 42 percent discount from an earlier asking price of HK$600 million. Then in January of this year, Lofter secured 11 Ki Lung Street when the owner, film star Simon Yam, sold out for HK$35 million.
Alvin Leung and Lydia Poon, directors of Hong Kong Capital Markets at JLL, said the entire acquisition of 1-15 Ki Lung Street involved eight single lots and came together in just five months.
In addition to residential units, the finished development, which will sit less than a minute’s walk from Prince Edward MRT station, could feature a retail podium with trendy dining, said Poon, who with Leung helped broker the deal.
Lofter, founded by former schoolmates Chow and Sherman Liang, got its start more than a decade ago redeveloping industrial properties into studio flats.
In 2018, Lofter purchased 108-114 Bedford Road in grungy Tai Kok Tsui for HK$243 million and picked up the adjacent 100-106 Bedford Road for HK$260 million. The intention was to redevelop the two sites into potentially 120,504 square feet of office space for a project called One Bedford Place.
Lofter last March acquired a 3,310 square foot site at 181-183 Sai Yee Street in Mongkok for HK$310 million and in September picked up the 2,800 square foot 2C-2D Boundary Street site in Tai Kok Tsui for HK$135 million. Both are residentially zoned.
Also in Tai Kok Tsui, Lofter last March announced it had purchased 71-75 Bedford Road, paying HK$192 million for the mixed-use site. Lofter plans to transform the property into Two Bedford Place as a follow-on to its 2018 acquisition.
On the commercial front, last September the company paid HK$267 million to acquire majority ownership of 11-13 Nanking Street in Jordan, adding a 2,768 square foot site to its portfolio that can be developed into as much as 33,216 square feet of finished accommodation.