The British turned over Hong Kong to mainland China more than twenty years ago, but the city’s elite seem to still recall late UK Prime Minister Winston Churchill’s admonition never to waste a crisis.
With the COVID-19 pandemic putting pressure on Hong Kong’s economy, the Asian financial hub’s super rich are seizing the opportunity to enjoy their favorite pastime — snapping up real estate in the city’s most expensive districts.
In the first of a pair of deals transacted recently, the family of the late Sir Quo-wei Lee, who served as chairman of Hong Kong’s Hang Seng Bank from 1983 to 1996, purchased an entire office floor in Central at a 25 percent discount.
Meanwhile, real estate investor Francis Law Sau-fai, the second son of late property tycoon Lo Siu-tong, bought a property in Wan Chai for a commercial redevelopment project.
Buying a Central Office Floor at a Discount
In Hong Kong’s priciest area, the Lee family bought an 11,062 square foot (1,028 square metre) office floor in Wing On House on Des Voeux Road for HK$286 million, according to a local media report on Friday.
The Lees acquired the sixteenth floor of the building, which spans from Hong Kong’s main tram line to Connaught Road where they intersect Pottinger Street, through registered company Polysan Limited, which includes Helen Hoi-lun Yick – the wife of Quo-wei Lee – together with their children Annie and Wendy Lee as directors.
Based on the transaction price, Polysan paid HK$25,854 per square foot for the office property located two minutes walking distance from MTR Central station.
The seller, Grandlines Limited, earned a book value gain of HK$202.5 after purchasing the floor in 1993 for HK$83.5 million, according to a report in Sing Tao Daily.
The most recent transaction in the building prior to this — of a mid-floor unit with a floor area of 1,400 square feet — took place in August 2018 at a price of HK$48.49 million at HK$34,635 per square foot, which is 25 percent more per square foot than what the Lee family paid.
The last time an entire floor was sold in the same building was in 2010 when an 11,062 square foot upper level was sold for HK$138 million — at the equivalent of HK$12,475 per square foot — making the Lee’s acquisition the first purchase of an entire storey in ten years.
Tapping into a Redevelopment Hotspot
Two subway stations east from Wing On House, the second son of late property tycoon Lo Siu-tong, Francis Law – who is also the executive director of property investment firm Toyo Mall Limited – acquired 72-76 Queen’s Road East in Wan Chai for HK$253 million, according to a report by the Hong Kong Economic Times over the weekend.
Located at the corner of Queen’s Road East and Li Chit Street, for the Shun Fat Building which currently spans 19,737 square feet of gross floor area including first floor retail.
Based on the transaction price, Law paid HK$12,800 per square foot for the 11-storey property, which currently generates a monthly income of HK$330,000.
Occupying a site area of 2,014 square feet, the 1982-vintage residential building has the potential to be converted into a commercial development that could yield up to 30,000 square feet of gross floor area, according to the local media account.
Law is tapping into a stretch along Queen’s Road East that has turned into a redevelopment hotspot owing to its proximity to Admiralty and Centra — with Swire Properties’ Three Pacific Place only a 3-minute walk away.
In January, Swire applied to redevelop a site including 46-56 Queen’s Road East, 2-12 Anton Street and 5-11 Landale Street as a 28-storey office building with a planned gross floor area of 215,000 square feet.