Hong Kong’s ‘King of Toys’ Francis Choi Marketing ASX Building in Sydney

Hong Kong toy tycoon Francis Choi Chee-ming has put up for sale the central Sydney home of the Australian Securities Exchange (ASX), as the bourse operator prepares to relocate to a newer building ahead of its lease expiry.

Choi, who earned the moniker “King of Toys” after his Hong Kong-based firm Early Light International became the world’s largest toy manufacturer, has reportedly appointed Knight Frank to manage a sales process for 20 Bridge Street, also known as Exchange Centre. The billionaire is seeking around A$300 million ($196 million) for the asset, according to an account in The Australian, which first reported the sales effort.

The marketing effort comes as data from JLL this month showed investment in Australian office assets surged to A$2.7 billion in the second quarter, representing a 355 percent increase from a year prior, as valuations begin to show signs of recovery amid an improving outlook for rental growth.

“The jump in sales in the second quarter (of 2024) partly reflects the improved price discovery as well as the updated valuations in the office sector that generally assisted with closing the bid-ask gap,” Luke Billiau, head of Australia and New Zealand capital markets at JLL told Mingtiandi.

Early Light International had not responded to Mingtiandi inquiries by the time of publication, while Knight Frank declined to comment.

Heart of the CBD

Choi is putting the grade-A property near Sydney’s harbourfront on the block after having reportedly fielded off-market approaches, and is marketing the asset as a repositioning play. Choi’s reported asking price amounts to A$14,757 on a per square metre basis.

Located in the heart of Sydney’s central business district at the intersection of Bridge Street and Pitt Street, the 20,329 square metre (218,820 square foot) building comprises 13 storeys of office space, the Exchange Square retail section on the ground floor, and an auditorium at the basement level.

Early Light acquired the 1999-vintage property for A$335 million in 2017 from Malaysian pension fund Kumpulan Wang Persaraan Diperbadankan, with ASX occupying over 45 percent of the building at the time.

Last month, ASX was reported to be moving into a new home spanning several office floors, along with retail frontage, at 39 Martin Place, a new commercial development located an 8-minute walk from 20 Bridge Street, which is expected to complete in the third quarter.

Situated directly above the upcoming Martin Place metro station, 39 Martin Place is being developed by Australian financial giant Macquarie and was sold to a 50:50 joint venture of Sydney-based real estate investor and developer Investa and Canada’s Manulife Investment Management for a reported A$800 million in 2021. Upon completion, the tower will have over 30,000 square metres of office space across 28 levels, as well as 2,000 square metres of retail space.

20 Bridge Street is one of several Sydney office assets to have been purchased by Choi’s firm. Early Light picked up the 1 Castlereagh Street office block from US private equity giant Blackstone in 2017, and in 2019 acquired the remaining 50 percent interest in the Northpoint Tower from Brisbane-based fund manager Cromwell Property Group after having bought the initial half stake from South Africa’s Redefine Properties in 2018.

Guangdong-born Choi, who ranks tenth on Forbes’ latest list of richest Hongkongers with a net worth of $8.2 billion, founded Early Light in 1972. The privately held firm established its property unit in 1997 and has since diversified into businesses including luxury watch retailing, automotive services, and kindergartens.

The company develops, owns and manages properties through its E. Lite Property subsidiary, which oversees a portfolio of office buildings, retail properties, residential complexes, hotels and serviced apartments, and car parks located in Hong Kong, mainland China and Australia.

Office Deals Surge

The marketing exercise by Choi comes after Australia logged A$4 billion of investment in office assets in the first six months of the year, representing a 54 percent jump from the same period last year, according to JLL.

Gross effective rents in central Sydney’s prime office market averaged A$990 per square metre in the second quarter while vacancy stood at 12.5 percent, with both of those metrics unchanged from the prior quarter, according to Cushman & Wakefield. Sydney’s central business district saw positive net absorption of 10,000 square metres and 13,500 square metres in the second and first quarters respectively, according to JLL.

“There is clear evidence of a recovery in deal volumes coming through,” said Billiau. “Confidence around the outlook of fundamentals is improving which is helping with investor conviction. The fact that sublease space has been declining in the Sydney CBD is a positive sign. This coupled with the high economic rent thresholds and lack of new supply coming through beyond this year is building the narrative around rental growth.”

Last month, Japan’s largest developer Mitsui Fudosan acquired a 66 percent stake in the 55 Pitt Street office development from ASX-listed property giant Mirvac. Located just steps from 20 Bridge Street, the 55-storey project has an estimated end value of A$2 billion ($1.3 billion).

That deal came two months after the manager of Singapore’s Keppel REIT agreed to pay A$363.8 million ($237 million) to purchase a half stake in 255 George Street from a Mirvac-managed fund. The 29-storey office building is located a two-minute walk from 20 Bridge Street.

In February, members of Singapore’s Ho family paid A$95.5 million to buy the 18-storey office block at 124 Walker Street in North Sydney from a fund managed by ASX-listed Dexus. That deal came just a few months after Japan’s Mitsubishi Estate teamed up with Sydney-based investment manager AsheMorgan to buy the 60 Margaret Street commercial complex in the New South Wales capital from Blackstone and Mirvac for A$777 million ($494 million).