Tycoon Payson Cha’s Hanison Construction Holdings has agreed to sell a serviced apartment building in the western district of Hong Kong island for HK$420 million ($53.7 million), earning a 66 percent mark-up on a property which it purchased less than four years ago.
Hong Kong-listed Hanison Construction, which is controlled by one of Hong Kong’s wealthiest families, disclosed in a filing to the Hong Kong Stock Exchange that it has agreed to sell the 26-unit property at 111 High Street in the Sai Ying Pun area to a Cayman Islands registered firm named Elevest Ltd.
At the consideration cited in the announcement, Hanison is getting the equivalent of just over HK$20,720 per square foot for the 20,270 square foot (1,883 square metre) property. For the financial year ended 31 March 2019, the serviced apartment had earned profits after tax and extraordinary items of HK$6.75 million.
Flipping Former Ovolo Property After Four Years
Hanison, which specialises in redevelopment and repositioning of en bloc properties in Hong Kong had purchased what was then known as the Ovolo apartments in the district two MTR stops west of Central for HK$253 million in 2015.
Known before Hanison acquired the 1997-vintage tower as Ovolo 111 High Street, the developer has since re-christened the project as simply One Eleven, leasing out 790 square foot one and two bedroom apartments in the hipster-favoured area of Hong Kong.
“The Directors consider that the current market presents a good opportunity for the Company to unlock the value of the Target Group,” Hanison said in its statement to the exchange. The company added that, “Accordingly, the Directors believe that the Disposal will enable the Company to reallocate capital into future investment opportunities and pursue other growth opportunities.”
Originally developed by Kerry Properties, Hanison had positioned One Eleven as a boutique project providing “Chicago Style” serviced apartments for professionals and executives who enjoy the privacy of living in a building with just one apartment per floor.
Two-bedroom units in tower are currently renting for HK$54,000 per month, with Apple TV and laundry services included, according to online leasing sites, with some of the units enjoying partial views of Victoria Harbour.
Mining for Gold in White Collar Residences
The sale of One Eleven is Hanison’s latest trade of a building once operated by Australia’s Ovolo hospitality group, which has since moved on from serviced apartments to hotels in Hong Kong.
In January last year, Hanison Construction scooped up an Ovolo-branded serviced apartment block in the neighbouring Sheung Wan area for HK$506 million ($64.7 million). That 25-storey building, is located about one kilometre east of One Eleven on Hollywood Road, and is just one subway stop west of Hong Kong’s Central commercial hub.
Chaired by Payson Cha, who also controls Discovery Bay developer Hong Kong Resorts International (HKRI), Hanison Construction has been active in en-bloc residential investments in Hong Kong’s up and coming western area.
Last October, Hanison purchased a serviced apartment building, also in the Sai Ying Pun area, from Singapore’s CapitaLand for HK$730 million ($93 million). The 25-storey Citadines Harbourview cost Hanison HK$16,680 per square foot, including some nice views of Victoria Harbour. The location is within ten minutes walk of the Sai Ying Pun MTR station and about one kilometer west of the Macau Ferry Terminal.
In May, Hanison sold a Sheung Wan commercial building jointly owned with Angelo, Gordon and Co for HK$1.1 billion after operating that asset as a serviced apartment business.