The family of Hong Kong’s late “Shop King” Tang Shing-bor is taking advantage of the city’s booming industrial market to raise cash, adding a 15th major asset to the clan’s series of disposals in the last seven months with the en-bloc sale of a Kowloon industrial building for HK$733 million ($93.9 million).
The buyer, Hong Kong-listed mobile data services provider Telecom Digital Holdings, has agreed to pay about HK$7,532 per square foot of built area to acquire the Wider Industrial Building, according to the group’s filing with the Hong Kong stock exchange last Wednesday.
The latest Tang family exit comes as full-year industrial capital values in the fourth quarter of 2021 grew 10.1 percent year-on-year, marking the fastest rate of expansion since 2014, according to a recent report from CBRE.
The disposal also takes place just two months after the Tangs were reported to have raised HK$91 million from the en-bloc sale of the Mai Tak Industrial Building, also located in Kwun Tong, to an undisclosed buyer. That deal followed the family’s sale of the Elegance Printing Centre in Hong Kong Island’s Shau Kei Wan to private equity giant Blackstone for HK$500 million in November.
Tangs Unload More Assets
The Wider Industrial Building, which occupies a 10,001 square foot (929 square metre) land parcel at 58 Tsun Yip Street, is located about 600 metres (656 yards) from the Kwun Tong MTR station.
The Tangs’ disposal of the 1981-vintage building will see the family sell its fifth en-bloc industrial asset in the past seven months, with the series of exits starting last July with the HK$2.24 billion sale of the East Asia Industrial Building to China Resources in the city’s largest industrial deal of 2021.
Telecom Digital’s whole-block acquisition would allow the group to use a portion of the 97,314 square foot property for office and warehouse purposes, while the remaining section would become a part of its property investment portfolio, the group said last week.
“(Bona fide offices) in the area are trading well above HK$10,000 per square foot,” said Tom Ko, executive director and head of capital markets at Cushman & Wakefield Greater China. “It is attractive to buy this one for under HK$8,000 per square foot for a revitalised office.”
With the original asking price set at HK$800 million, according to Ko, the new owner would be acquiring the industrial building at an 8 percent discount.
The mobile services provider, which over the past year saw its stock price rise 49 percent, is able to expand its services in Kowloon with the latest acquisition, adding another location to its existing 27 shops in the area.
Industrial Market Outperforms
The family of Tang Shing-bor is once again cashing out of an industrial asset after the sector remained the most active segment in the fourth quarter of 2021, accounting for 41 percent of Hong Kong’s total investment volume during the period.
The HK$9.2 billion worth of industrial deals transacted in the three months to December marked the highest quarterly turnover since 2005, according to CBRE.
With their latest disposal, the Tangs are the latest of Hong Kong’s old-school investors to turn to the industrial sector to raise cash. Just under 200 metres from the Wider Industrial Building is the Catic Building at 44 Tsun Yip Street, which the city’s “Minibus King” Ma Ah-muk sold at a 35 percent discount for HK$390 million last November.
About one month before that sale, Emperor International Holdings, the property division of local conglomerate Emperor Group, sold the Toppy Tower in Kwai Chung for HK$585 million to a company controlled by the family of Hong Kong justice secretary Teresa Cheng.