CLSA Capital Partners is reportedly close to selling Zing!, a retail tower in the heart of Hong Kong’s Causeway Bay shopping district, for HK$1.9 billion ($243 million) to a Macau-based consortium.
The Hong Kong-based alternative asset manager is expected to complete the sale soon, according to a recent report in the Hong Kong Economic Times, marking the city’s largest en bloc transaction in recent weeks. The reported value implies a price per square foot of HK$24,000 ($3,072) for the 27-storey, 79,051 square foot (7,344 square metre) property at 38 Yiu Wah Street, adjacent to Wharf’s Times Square complex.
Zing!, a so-called “Ginza-style” shopping mall, is modelled after the retail towers with nightlife options in Tokyo’s prime shopping district. The building has floor plates ranging from 1,750 to 3,400 square feet, and is tenanted by food and beverage operators, gyms, clubs, beauty salons and other lifestyle venues. The property is said to generate a 3.2 percent yield.
Retail Tower May Sell for 17% Less than Hoped
The private equity arm of Asian investment group CLSA purchased the building then known as Bigfoot Centre for HK$1.4 billion in 2014, then renovated and re-launched it as Zing! in March 2015. This past May, the company put the tower on sale via public tender and received strong interest from a number of potential buyers.
At the time, the firm expected the property to fetch more than HK$2.3 billion. An unidentified Hong Kong family agreed to buy the building for HK$2.1 billion ($268.6 million) in August, according to a local media report previously cited by Mingtiandi, but the deal ultimately fell through.
Return of the Mystery Buyer?
Zing!’s new buyer is reported to be a Macau-based group that has invested in other en bloc commercial buildings in core areas of Hong Kong including The L Plaza on Queen’s Road Central (Sheung Wan) and The L Square on Lockhart Road (Causeway Bay).
It is unclear whether the buyer is the same party that offered to buy Zing! in August. At the time, it was reported that the mystery investor owned The L Plaza, having purchased the entirely of that commercial building in 2015, which it was offering to sell to CLSA Capital Partners as part of the deal for Zing!
Under the terms of that failed agreement, the low-key local family would pay for Zing! by selling The L Plaza for HK$1 billion ($127.9 million) to CLSA Capital Partners while paying an additional HK$1.1 billion ($140.7 million).
Hong Kong newspaper The Standard reported in May that Zing! had been generating over HK$60 million ($7.7 million) in annual rental income, and had seen rents jump by 70 percent in just three years from HK$35 to over HK$60 per square foot.