Li Ka-shing’s CK Asset has agreed to sell its 21 Borrett Road project in Hong Kong’s Mid-Levels for HK$20.8 billion ($2.6 billion) to a private wealth manager founded by former UBS bankers, in a sudden asset disposal by the city’s second-largest developer by market cap.
CK Asset anticipates a HK$6.3 billion gain on the sale of the 152-unit luxury residential development to Singapore-based Sino Suisse, according to a Wednesday filing with the Hong Kong stock exchange. The group controlled by Hong Kong’s richest man said it expects to use the proceeds for general working capital purposes, but the transaction follows on the heels of reports that Li has seen his sizeable UK investments take a drubbing in line with the plunge in value of the British pound.
Market watchers told Mingtiandi that the slow progress of sales at 21 Borrett Road may have factored in CK Asset’s surprise decision to exit an entire luxury project, with the builder having sold a mere 33 apartments for a combined total of HK$6.8 billion since the 115-unit first phase was launched in February 2021.
“We believe it’s a wise deal for the landlord because they can secure the sale proceeds in one go instead of marketing individual units which might take a very long time under current uncertainties to the market,” said Cyrus Fong, senior director of valuation and advisory at Knight Frank.
Managing Mainland Money
The buyer, Sino Suisse, was set up five years ago by former UBS executive Albert Liu, who had headed the Swiss bank’s ultra-high-net-worth business in China for 16 years and oversaw assets under management of more than $27 billion. He co-founded Sino Suisse alongside former UBS colleague Ruth Chung, who now heads the Greater China market at BNP Paribas Wealth Management.
In an interview with Singapore Management University last year, Liu said he expected Sino Suisse to reach $7 billion in AUM by 2024 and breach the $10 billion mark around 2026. The latest available public data show that the asset manager had about $4 billion in AUM towards the end of last year.
Sino Suisse specialises in wealth planning services for ultra-rich individuals and families, especially those from Greater China, according to a 2019 interview with chief investment officer Lawrence Lee. Late last year, the asset manager brought aboard Credit Suisse veteran Alex Nicholas Lee to further broaden its pool of clients in Greater China.
There is no record of Sino Suisse having previously dealings at 21 Borrett Road or any other CK Asset project, said Alex Leung, senior director at CHFT Advisory and Appraisal. He said market rumours suggest that the firm will be keeping the second phase of the project as a long-term investment for rental income.
CHFT calculates the unit price of the en bloc deal at roughly HK$62,000 per square foot of saleable area, compared with the average unit rate of about HK$83,400 for the 33 sold apartments.
Tycoon in Selling Mode
The sale of 21 Borrett Road is the latest in a recent string of disposals by CK Asset, and the largest by far.
In March, CK Asset completed the sale of its 5 Broadgate building in London to South Korea’s National Pension Service for £1.21 billion ($1.57 billion), marking the UK capital’s biggest property deal in almost five years.
The developer had purchased the 13-storey office building, which serves as UBS’s London headquarters, from Singapore sovereign wealth fund GIC and local builder British Land for £1 billion in mid-2018.
In August, CK Asset agreed to sell its Stars of Kovan mixed-use project in Singapore to Hong Kong-listed Fortune REIT for S$88 million ($61 million). The 2019-vintage development features apartments, 36 shops and 80 car-parking spaces.
Bloomberg reported that the developer has been stung by souring bets in the UK, a market accounting for almost a third of CK Asset’s revenue, with Li Ka-shing’s business empire losing $1.5 billion in one day after the pound’s 26 September crash.
Beatrice Laforga contributed research to this story.