Hong Kong-based Wing Tai Properties has sold off a commercial building in the city’s Wan Chai area for HK$2.85 billion ($364 million) to local property investment firm Winland Group, according to an announcement by Wing Tai today to the Hong Kong stock exchange.
The sale of the 1978-vintage W Square tower at 314-324 Hennessy Road in Wan Chai — two metro stations east of Central — comes as Hong Kong’s property market continues to soar in the new year.
Wing Tai’s partner in the transaction is paying the equivalent of HK$25,000 ($3,197) per square foot for the 26-storey tower, which leases space to restaurants on its first seven floors, including the basement level, with the remaining space reserved for office use.
Paying HK$2.85B for a Two Percent Yield
The building, which has a gross floor area of 115,000 square feet (10,684 square metres), is said to be fully occupied at present with an average rent per square foot of more than HK$40 ($5.1), providing a two percent rental yield for Winland, which also owns the Elizabeth House commercial complex on Gloucester Road in the city’s Causeway Bay retail district. The Hong Kong firm also has projects in mainland China, including the Winland International Business Center on Beijing’s Financial Street.
Typical floors in the office zone of W Square measure approximately 5,093 square feet (473 square metres) each.
Built in 1978, W Square was formerly owned by Bank of East Asia, before being sold to Wing Tai Asia, the development division of Wing Tai Properties, in 2005 for HK$540 million ($69 million). The group later spent HK$200 million ($25.6 million) for renovation, with this latest sale estimated to have generated a profit of HK$2.31 billion ($295 million) for the publicly-listed developer.
Wing Tai Stays Busy in Hong Kong and Singapore
Wing Tai Properties focuses on developing grade A offices and luxury homes, but also manages and invests in hospitality assets under its pan-Asian Lanson Place brand.
In October, Wing Tai together with CSI Properties won the rights to redevelop a 434,000 square foot (40,320 square metre) commercial site in Hong Kong’s Central district, for a reported HK$11.6 billion ($1.49 billion).
The developer was also active in Singapore during the second half of last year, teaming up with Keppel Land to buy a prime residential site in the city’s Serangoon Garden neighborhood for S$446.3 million ($327 million).