Goldin Financial Global Centre Sells Again, PAG-Mapletree JV Reported as Buyer

Following a series of failed tenders and cancelled sales of Hong Kong’s Goldin Financial Global Centre (GFGC) over the past two years, liquidators of the former headquarters of Goldin Financial Holdings are said to have reached a deal to sell the troubled Kowloon East tower.

Stamp duty has now been paid for sale of the Grade A office property at 17 Kai Cheung Road in Kowloon Bay, according to brokerage sources who spoke with Mingtiandi, with relevant parties said to be currently logging the deal with the city’s Land Registry.

The identity of the buyer has yet to be confirmed, however, market reports indicate that a joint venture between private equity firm PAG and Singapore’s Mapletree Investments has agreed to purchase the 28-storey tower for about HK$5.6 billion ($720.1 million). Mapletree representatives declined to comment and PAG had yet to reply to inquiries from Mingtiandi by the time of publication.

The reported deal comes after receivers appointed to liquidate the 852,501 square foot (79,200 square metre) tower on 1 November had reportedly announced the termination of a September deal to sell the building for HK$6.7 billion after the transaction failed to complete.

Sliding Valuation

The reported price for this latest transaction would value the Goldin Financial Global Centre at around HK$6,568 per square foot of floor area, or nearly 17 percent less than the HK$6.7 billion deal agreed to in September with erstwhile buyer HG Real Estate Investment Hong Kong Co Ltd.

The new deal would also price the property at around 18 percent less than the HK$6.8 billion in debt Goldin Financial had secured with the asset, with the failure to meet that obligation having led to the property being seized by receivers in July 2020.

In an initial tender in September 2020 the receivers had set a value of HK$12 billion on the LEED Platinum-certified tower. 

Following the termination of the September transaction, the would-be buyer, HG Real Estate Investment Hong Kong, filed a lawsuit last month claiming that the sale and purchase agreement had been terminated without cause. Representatives of the receivers did not respond to inquiries from Mingtiandi regarding the case.

Also in November, joint provisional liquidators took control of Goldin Financial, with directors of the Hong Kong-listed firm retaining only limited powers relating to the ongoing winding-up proceedings against the company.

Goldin Financial received at least a temporary reprieve from a winding-up petition filed against the company formerly controlled by mercurial tycoon Pan Sutong, when liquidators of the company Goldin last week announced that the Bermuda Court had adjourned a hearing on the case until 20 January 2023.

Creditors have sought to wind up the company since filing a petition with the Bermuda court in August 2020.

Working Together

Should PAG and Mapletree consummate the reported transaction, it would mark the second time that the two companies have worked together on a deal involving a Kowloon East office property, following PAG’s nearly HK$9 billion purchase of what was then known as Mapletree Bay Point in 2019.

That property, which was developed by Mapletree on a site 2.2 kilometres (1.4 miles) southeast of the Goldin Financial Global Centre, won Manulife as a tenant one year ago and was renamed Manulife Place after the Canadian insurer agreed to lease 145,000 square feet in the tower.

The Goldin Financial Global Centre has a more challenging location than Manulife Place, however, with the building reported to be 30 percent vacant in May of this year.

The market for office space in Hong Kong has also been unfavourable, with the total amount of grade A space leased in the city contracting again this year and asking rents in the Goldin Financial Global Centre now averaging around HK$30 per square foot per month, according to listings posted by JLL.