
New World Development has put KOHO on the market
New World Development has listed for sale a Hong Kong commercial property at an asking price of HK$3 billion ($390 million), as the company looks to offload non-core assets, according to a person familiar with the matter who spoke to Mingtiandi.
The Hong Kong-listed developer has put the former industrial building now known as KOHO on the market at a price tag which is almost double the HK$1.6 billion the developer paid when it purchased the property from fund manager Pamfleet in 2014.
The move comes amid a downturn in the Hong Kong real estate market that has seen rents slide and property investment volumes plummet 62 percent during the first three months of this year compared with the same period in 2019, according to property agency research.
Selling an Old Wool Factory
Located at 73-75 Hung To Road in Kwun Tong, the 40-year-old former wool factory is located in an industrial area of Hong Kong in Kowloon East, and is around nine minutes’ walking distance from the Kwun Tong MTR station.
Based on the building’s 160,000 square feet (14,864 square metres) of gross floor area, the HK$3 billion asking price equates to HK$18,750 per square foot.
The 12-storey property’s current tenants include Tencent-backed creative workspace provider WeStart, which occupies 16,500 square feet, with rents in KOHO listed online at HK$24 per square foot per month.

Adrian Cheng is looking for a buyer for his company’s trendy industrial conversion
Hip Seng Group of Companies, which is the construction arm of New World, occupies offices spread across the seventh and eighth floors of the property.
New World acquired 73-75 Hung To Road a year after Pamfleet bought it in 2013 for HK$1 billion and converted it into offices.
Shedding Non-core Assets
The potential sale would continue a series of divestments by New World as it continues to seek to offload non-core assets after posting a 20 percent drop in net profit after tax across Hong Kong and mainland China in 2019.
Just two months ago, New World listed for sale a 4-storey retail podium in the Cosco Tower in Sheung Wan, together with 19 parking spaces, at a reported asking price of HK$900 million.
Based on the property’s 27,808 square feet of gross floor area, New World is hoping to sell that asset at the equivalent of HK$32,364 per square foot.
Also in February, the company sold its ownership interest in a pair of mid-market Hong Kong community malls to MTR Corporation for HK$3 billion, in a move intended to generate cashflow for its core businesses.
In that deal with the Hong Kong railway operator, New World divested its entire 50 percent stake in Telford Plaza II, as well as selling off the whole of its 21 percent interest in Popcorn 2.
Assembling Redevelopment Sites
At the same time that it has been shedding these non-core assets, New World has continued to make acquisitions of potential redevelopment sites in the city.
In November last year, the company controlled by Hong Kong’s billionaire Cheng family acquired a set of flats in the upscale neighbourhood of Kowloon Tong for a combined HK$458 million for a potential redevelopment.
Three months before that purchase, New World paid more than double the estimated market value for three shops in Hong Kong’s 67-year-old State Theatre, which brought its ownership of the entertainment complex in North Point to 95 percent, as it targeted a compulsory purchase of the historic property.
Looking to Sell in a Downturn
New World is looking to offload its Kwun Tong industrial asset and its Sheung Wan retail podium after ten months of first anti-government protests and then the COVID-19 crisis, has put a dent in Hong Kong office leasing.
In a report released last week, CBRE said that grade A office rents in Greater Central dropped 4.1 percent from the previous quarter, while rents in Kowloon East – where Koho is located – slid 3.5 percent.
Against this backdrop of sliding rents, commercial real estate investment fell 62 percent to HK$7.5 billion in the first quarter, down from HK$20.2 billion in the same three months of 2019.
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