Another member of the consortium behind last year’s landmark HK$40.2 billion ($5.15 billion) acquisition of the Center on Hong Kong’s Queen’s Road is getting ready to flip his floor of the iconic office tower — but not before slicing it into bite-sized units.
Asia Property Agency founder Raymond Tsoi Chi-chung, one of the members of the consortium CHMT Peaceful Development Asia Limited, which purchased the 73-storey office tower from CK Asset in November, confirmed on Thursday that he will break down the 22nd floor of the building into small offices to be sold as individual assets, just months after some of the investors had vowed not to resell the skyscraper.
Tsoi has set a minimum price tag of HK$70 million ($8.9 million) for each piece of the 25,000 square foot floor, with the sale set to kick off before August 10th.
Giving Small Investors a Piece of a Big Building
Speaking to the media, Tsoi, who started out as an agent selling homes in North Point, said the plan to turn the office floor into 12 individual offices had been approved by the authorities. A few years ago the agency owner began getting involved in commercial investments by acquiring en-bloc retail assets for resale as strata-title shop units,
Now Tsoi will give investors will have a chance to purchase units as small as 1,600 square feet in what has been a prestigious address in the city. According to Tsoi, the minimum cost of acquiring an entire floor in The Centre currently stands at HK$1 billion, putting whole floors out of reach of most potential buyers.
“With the threshold this high, small investors could hardly move their businesses into the building,” he noted. While no asking price was stated, Tsoi indicated that a bank valuation had indicated that the property is worth around HK$48,000 per square foot — more than 45 percent higher than the average unit cost paid by the CHMT consortium when it acquired the building in November. The veteran broker added that, “Many investors have enquired about the plan, the demand is high.”
Tsoi’s remarks were made eight months after he told the South China Morning Post that there was no plan to resell the space at The Center, noting at the time that, “It is a rare product in Central.”
“Long-term Vision” Has a Price List
At the same event where Tsoi made his comments, his fellow consortium members, Robert Ma Kiu-sang, son of Hong Kong’s largest minibus operator Koon Wing Motors founder Ma Ah Mok and Lo Man-tuen, chairman of cassette tape manufacturer Wing Li Group both said the CHMT participants were aiming for long-term rental returns from the investment and the majority of directors were committed to the plan.
However, around a month after the transaction, a price list of the newly-purchased floors of The Center surfaced among investors aiming to gauge market sentiment for a possible resale.
The group paid around HK$33,000 per square foot to buy 75 percent of the space in Hong Kong’s fifth tallest skyscraper.
On July 4th local media reported that Wing Li’s Lo had sold the building’s 30th floor for around HK$1.07 billion, making a profit of HK$250 million eight months after the high-profile purchase and securing the equivalent of HK$43,000 per square foot for the space.