Hopson Development chairman Zhu Mengyi is buying a Hong Kong HQ
Hong Kong-listed builder Hopson Development announced last week that it has become the latest mainland buyer of a floor in the Center, a premium office property located in Hong Kong’s Central business district.
The Guangdong-based builder is paying approximately HK$1.1 billion to buy the 25,695 square foot (2,400 square metre) property from a company held by local investor Johnny Cheung Shun-yee, according to a Hong Kong Stock Exchange filing.
Also known as “Logistics Cheung” the seller was part of a team of speculators and investors who bought the 73-storey tower from Li Ka-shing’s CK Asset last November for a record-breaking HK$40.2 billion with plans to profit by selling the en bloc property floor by floor.
Local Investor Sells Half of Holdings
Hopson said it would take over the asset on Queen’s Road Central together with shareholder loans of between HK$1.06 billion ($135.51 million) and HK$1.17 billion, making the purchase price equivalent to between HK$41,331 and HK$45,689 per square foot.
The final consideration of Hopson’s target property will, however, be determined after completion by reference to the acquisition value (being HK$1.118 billion) and the assets and liabilities of the target company.
As currently understood, Hopson’s acquisition of the strata asset is at a price is 25 percent to 38 percent higher than the average price per square foot that the investor consortium paid to acquire The Center 11 months ago, with Zheng having purchased the 42nd, 43rd, 49th and 50th floors.
Cheung began marketing his floors in April of this year at an asking price of HK$55,000 per square foot. In August the investor was reported to have sold the 50th floor to the Hong Kong-listed arm of Malaysian developer Guoco Group for an undisclosed sum.
Hopson Buys Hong Kong Headquarters
For Hopson, the acquisition marked the Hong Kong-listed property development company’s first self-holding property in Hong Kong.
The Guangdong-based builder said it intends to hold the Grade-A target property for self-use as its office in Hong Kong subject to the expiration or earlier termination of all the existing tenancies in or around April 2019. The acquisition can also broaden the fixed asset base of the group, it added.
Upon completion of the deal, The Center (49) Limited will become an indirect wholly owned subsidiary of the Hopson Development and its principal asset is the 49th Floor of The Center, with a total gross floor area of approximately 25,695 square feet.
Although established in Hong Kong in 1992, Hopson Development has traditionally focused on mainland China’s property market, with more than 80 completed residential and commercial projects spread across the Pearl River Delta area, the Yangtze River Delta economic circle and the Bohai economic ring.
Hopson Development is the new owner of the 49th Floor of The Center
The group is controlled by Zhu Mengyi, one of the richest men in China. The 59-year-old Zhu, born into a poor peasant family in Guangdong province, rose to fame with the kick-off of his 600,000 square meter Huajing New Town (华景新城) mega-project in Guangzhou’s Tianhe district in 1993. Within a decade Zhu had turned Hopson Development into China’s first property company to record annual sales revenue exceeding RMB 10 billion.
Although listed in Hong Kong, Hopson Development has up until now no known record of owning any assets in the city.
Strata-Title Sales Continue
Cheung and his team of local investors, which after some reshuffling included Kingston Financial boss Pollyanna Chu Yuet Wah, Shimao Property chairman Hui Wing Mau and “Minibus King” Ma Ah Muk have been working hard to profit from their bet on the Center, even has demand for strata title assets has slowed in Hong Kong the past two months.
Two other investors besides Cheung have sold off floors in the tower, with another floor divided into 12 pieces to be sold room by room.
In July, Lo Man-Tuen, chairman of cassette tape manufacturer Wing Li Group, reportedly 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.
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