Late September’s news that the Goldin Financial Global Centre had finally sold after a two-year struggle for the Hong Kong office tower appears to have been premature, according to local media reports of a new legal case involving the property.
The buyer of the 28-storey building in Kowloon East, identified as HG Real Estate Investment Hong Kong Co Ltd, says it was notified on 1 November by receivers holding the property that the HK$6.7 billion ($850 million) sale and purchase agreement would be terminated and that HG’s HK$250 million deposit would be forfeited, according to an account by the HK01 news site, which cited court documents.
HG has filed a petition with the High Court against the tower’s receivers asking the court to issue an order to enforce the sale and purchase agreement and to prohibit the receivers from selling the 852,501 square foot (79,200 square metre) tower, HK01 said. The receivers had not responded to requests for comment by Mingtiandi by the time of publication.
The latest turn of events comes after a 21 September social media post by Savills declaring the 2016-vintage tower “SOLD” and the transaction a “DONE DEAL” without providing details on pricing or the identity of the buyer. The property services firm had managed a tender of the building on behalf of creditors stiffed by defaulting mainland conglomerate Goldin Financial. Savills representatives did not respond to Mingtiandi queries regarding the reported failure of the transaction.
Shades of Past Flops
The apparently aborted sale has a familiar ring to followers of the Goldin Financial Global Centre saga, coming after several false starts.
In late 2020, in a move seen by some observers as an attempt to block the receivers’ tender of the building, Goldin announced that a businessman under the name “Fong Tim” had agreed to buy the building at 17 Kai Cheung Road in Kowloon Bay, stalling moves by creditors. When that sale failed to proceed, and after a protracted legal battle was declared void, the purported buyer was forced to forfeit a HK$2.03 billion deposit.
A fresh tender for the building was launched in May of this year, with media reports in September naming local development giant Nan Fung as the buyer. Representatives of Savills denied naming Nan Fung as the buyer and declined to provide further details on the sale. Inquiries to Nan Fung in September went unanswered.
At the reported HK$6.7 billion price, the Grade A asset would be selling for 44 percent below the HK$12 billion minimum set in an initial tender commenced in September 2020 after the property was seized by receivers in July of that year, pencilling out to HK$7,859 per square foot.
Building in Distress
Reported to be 30 percent vacant in May of this year, Goldin’s former trophy has struggled as a high-specification building in a secondary location within the emerging Kowloon East commercial hub at a time when occupiers have been cutting back their footprints and investors have been keeping their cheque books locked away.
Cushman & Wakefield reported that office leasing in Hong Kong saw an uptick in the third quarter, with tenants leasing more space than they vacated during the period, led by continuing demand from flexible workspace operators.
Occupiers leased 183,000 square feet more than they gave back in the July-September period, compared with a contraction of 176,900 square feet in the preceding three months, the property consultancy said.