OCBC is picking up the the Gloucester Road property at 27% off the 2013 price (Image: Google)
Hong Kong’s Emperor International is selling an office building in Wan Chai for about HK$428 million ($55.1 million) less than what it paid to acquire the property in 2013, as the distressed developer struggles for liquidity.
Emperor has agreed to sell the China Huarong Tower at 60 Gloucester Road to the Hong Kong unit of Singapore’s Oversea-Chinese Banking Corporation for HK$1.16 billion, according to an exchange filing on Friday, indicating a 27 percent markdown from what it paid for the office tower 12 years ago.
The real estate unit of local tycoon Albert Yeung’s Emperor Group said the disposal will help it repay debt and replenish working capital after having disclosed in June that it had overdue loans totalling HK$16.6 billion ($2.1 billion),
“The proceeds from the disposal will be used for strengthening the group’s financial position including but not limited to the enrichment of working capital for the group’s property development and property investment business and repayment of bank borrowings which may include certain facilities maintained with relevant parties to the transaction,” the company said.
Emperor International has outstanding loans with OCBC Bank, but none of the liabilities were secured by the Gloucester Road property, Emperor added.
Property Comes Full Circle
Situated about a four-minute walk from Wan Chai MTR station, 60 Gloucester Road is a 26-storey commercial tower built in 1982. At the HK$1.16 billion sale price OCBC is paying the equivalent of HK$12,145 per square foot for the 95,515 square foot (8,873 square metre) property.
Emperor Group chairman Albert Yeung is lowering his gearing (Getty Images)
The property generated net rental income of HK$50.2 million for the year ended 31 March, up 5.6 percent from a year earlier, according to Emperor International’s filing.
Emperor International had purchased what was then known as Wing Hang Finance Centre from local lender Wing Hang Bank in 2013 for HK$1.588 billion. Wing Hang Bank was acquired by OCBC a year later and renamed as OCBC Wing Hang Bank before being relabeled as OCBC Bank (Hong Kong) in 2023.
The transaction, which is subject to vacant possession as well as shareholders approval, is expected to close in January 2026.
Emperor International said it had taken 11 loans from OCBC Bank (Hong Kong) by last November, with ten of those facilities, with principal amounts ranging from approximately HK$4.6 million to HK$490 million, still having outstanding balances.
Debt Crunch Deepens
The China Huarong Tower sale comes after Emperor International on 31 March closed the books on a sixth straight year of red ink. For its most recent financial year the property firm reported an attributable loss of more than HK$4.7 billion, with Emperor citing fair value losses on investment properties as a key factor.
With 18 commercial and industrial buildings in a portfolio spanning Hong Kong, Macau, mainland China and the UK, according to its website, Emperor moved to reduce its leverage in July last year when it agreed to sell a portfolio of retail, residential and industrial properties across Hong Kong to its chairman.
The HK$1.15 billion disposal comprised retail and residential units in Causeway Bay, Tsim Sha Tsui and Kennedy Town and a pair of industrial buildings in the Tuen Mun area.
Last November, sister company Emperor Entertainment Hotel, the group’s HKEX-listed hospitality arm, agreed to sell a 57-unit serviced apartment block in Hong Kong’s Kennedy Town area for a property value of HK$275 million after the price fell by nearly half in two years.
Note: This story has been updated to clarify that OCBC (HK) paid HK$1.16 billion for the property, which is equivalent to HK$12,145 per square foot. Mingtiandi regrets the error.
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