Hanison Sells Half-Stake in Kowloon Project to Angelo Gordon as HK Market Revives

A set of deals announced at the end of March points to a continued thawing of Hong Kong’s property investment market and heightened prospects for urban redevelopment projects in the city.

Hanison Construction, controlled by the Cha family behind developer Hong Kong Resorts International, agreed to sell a 50 percent interest in two separate sites. Samson Paper, meanwhile, divested of its space at Kowloon Bay Cargo Centre as part of an ongoing liquidation of the paper and packaging supplier.

Hanison last Wednesday said it had sold a half-stake in a development parcel at 57A Nga Tsin Wai Road in Kowloon, measuring 8,092 square feet (752 square metres), for a total consideration of HK$160.5 million ($20.6 million). Hanison originally paid HK$240 million for the property in January 2017.

In a filing with the Hong Kong stock exchange, the buyer was identified as a BVI-incorporated limited partnership controlled by New York-based real estate fund manager Angelo Gordon. The maximum gross floor area of the property is 24,273 square feet, meaning the buyer paid HK$13,225 ($1,701) per square foot of GFA for the stake.

Dealing by Halves

On the same Wednesday, Hanison sold a half-stake in a 67,314 square foot site at 121 Tong Yan San Tsuen in the New Territories for a total consideration of HK$67.5 million.

The buyer was named in a filing as a BVI-incorporated company controlled by local developer Nan Fung Group.

Hanison said the two stake sales enabled the company to unlock value from the sites, both on medium-term land leases, while maintaining a 50 percent share of the profits from any future development.

In Kowloon East, a traditionally industrial area undergoing redevelopment, Samson Paper recently sold Unit 2B and loading spaces on the second floor of Kowloon Bay Cargo Centre for HK$182 million, according to a report by news website HKET.

Samson originally purchased the 36,886 square foot half-floor space, which includes four truck bays for loading and unloading, in 1990 for HK$41.3 million. The buyer is reported to be Australia-based industrial developer Goodman, which in February bought the lower half of the Seapower Industrial Centre in Kowloon East’s Kwun Tong area from Samson for HK$570 million.

Samson announced last week that it had moved its headquarters from the Seapower Industrial Centre to the World Tech Centre in Kwun Tong.

Fond of Funds

Hanison’s sale of a half-stake in the Nga Tsin Wai Road site was in keeping with the real estate firm’s record of joint ventures with Angelo Gordon and other global fund managers.

In May 2018, Hanison and Angelo Gordon sold the Queen Central commercial building they owned in Sheung Wan to a joint venture between mainland investor Hugo Lam and Hong Kong-listed Asia Cassava Resources for HK$1.1 billion — up from HK$600 million when the pair purchased it in 2016.

A few months later in 2018, Hanison began selling on a strata-titled basis a 23-storey office tower in Cheung Sha Wan co-owned with Hong Kong fund manager PAG. The developer started by putting the 9th and 19th floors on sale with prices ranging from HK$22.7 million to HK$28.4 million.

In August 2019, a joint venture of Hanison and a fund managed by China Merchants Capital agreed to sell a Kwai Chung industrial building to “shop king” Tang Shing-bor for HK$1.1 billion. The JV flipped the building after holding it for 15 months, earning a markup of almost 53 percent on the HK$720 million price the joint venture had paid for the asset.