
Hong Kong tape tycoon David Chan Ping-chi sold a floor in the Center for HK$1.1 billion.
Hong Kong tycoon David Chan Ping-chi has taken a step towards cashing out his holdings in the Center on Hong Kong’s Queen’s Road, selling a floor in the office building nearly two years after joining a consortium which acquired the tower from the city’s richest man.
Known locally as the “King of Cassettes,” the chairman of local tape and film manufacturer Acme Group sold his 38th floor in the prime office tower to an unidentified mainland investor for HK$1.08 billion ($140 million), according to an account in the Hong Kong Economic Times on Monday.
Chan’s anonymous buyer paid the equivalent of HK$42,000 per square foot of floor space in the 73-storey tower or around 27 percent more than the average value paid by Chan and the other members of the consortium when they acquired 75 percent of the space in the Center from Li Ka-shing’s CK Asset Holdings for HK$40.2 billion in a deal signed in October 2017.
Selling in Pieces to Pull in Profit
Chan and a host of other buyers including Shimao Properties chairman Hui Wing Mao and local financier Pollyanna Chu had paid an average of HK$33,000 per square foot for the Center when they purchased the building, with many of the individual buyers betting that the grade A tower would be worth more when sold off in pieces than they had paid for the skyscraper as a whole.
Chan, who bought nine floors in the tower, has become a leading proponent of this buy-en-bloc-and-sell-strata strategy. Having sold the 25,000 square foot (2,322 square metre) 38th floor, the investor is also selling the 39th floor room by room as Hong Kong’s commercial market began to warm up in April.
Chan, owns the 39th floor in a partnership with Hugo Lam Chi-fung, founder of local snack retailer Best Mart 360, and in late April revealed that he had begun selling the floor in pieces after slicing it into 12 units ranging in size 1,841 to 3,140 square feet. In this bite-size approach to sales, the pair are now commanding prices from HK$41,000 to as much as HK$48,000 per square foot for the space, according to a local media account last week.
To help achieve this return Chan is also trying out a new role as king of commissions, with the investor said to be offering brokers commission rates of 4 percent — more than double the usual rate — for sales of his strata space, according to market sources with knowledge of the offer who spoke with Mingtiandi.
39th Floor Already Selling
The plan appears to be getting traction already with two units on the 39th floor already changing hands last week according to local media reports. Ricky Yeung Chiu-sing, brother of Albert Yeung — the chairman of local property and gaming conglomerate Emperor Group — paid the equivalent of HK$47,000 per square foot when he purchased an 1,843 square foot room on the floor for HK$87.5 million, while an unidentified high net-worth investor spent HK$42,000 per square foot to purchase a 2,102 square foot unit for HK$88.5 million, according to the local press account.
Chan and Lam also found a new owner for the most expensive space on the floor this month, selling a 2,416 square foot sea-view unit for HK$117 million, or HK$48,435 per square foot to an unnamed buyer. All three rooms are said to have formerly been leased to Goldman Sachs, which earlier relocated from the Center to Lee Garden Three in Causeway Bay last April.
Commercial Market Climbs 60% in April
Chan’s sales are the latest in a burst of action at the Center as analysts see an increase in commercial market activity in Hong Kong.
During April another investor in the Center, Asia Property Agency founder Raymond Tsoi Chi-chung sold a pair of units on the 22nd floor after following a fragmentation approach similar to Chan. Tsoi sold his last piece of the building for HK$99.7 million, or just under HK$35,000 per square foot, local media reported on April 26th.
The set of exits are part of a rebound in activity that saw the value of commercial and industrial transactions in Hong Kong rise to HK$12.6 billion in April, according to figures from local brokerage Midland Realty — up 60 percent from March.
The number of transactions in the sector also rose to a five-month high in April climbing 87 percent from the previous month to reach 771 deals, not counting connected transactions valued over HK$1 billion.
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