Goodman Group late last month agreed to acquire nearly three-quarters of an industrial building in the New Territories from the family of Hong Kong’s late “Shop King” Tang Shing Bor as the Australian developer looks to expand its now fully leased portfolio in the city, according to a company spokesperson
Goodman is purchasing 168,488 square feet (15,653 square metres) of the space in the Chuan Kei Factory Building in Kwai Chung from Tang family vehicle Stan Group, which amounts to 72.53 percent of the entire building, for a reported HK$520 million ($66.2 million), as developers compete for shed space in one of Asia’s busiest port cities.
“Goodman’s current stabilised portfolio is over 99 percent leased, and this was a good opportunity to secure more space to service the strong customer demand we are experiencing,” a spokesperson from the group told Mingtiandi. “Goodman intends to take on building management responsibilities and upgrade the facilities in order to service our growing customer base.”
When the sale by Stan Group, which is controlled by Stan Tang, the youngest son of the late property tycoon, is completed this month, it will mark the 19th major sale of a Hong Kong property by the Tang family this year as the clan works to pay down debts related to ill-fated hotel ventures and other challenges.
Expanding in Kwai Chung
Located at 15-23 Kin Hong Street, the Chuan Kei Factory Building,is within a 5-minute drive from both the Kwai Hing and Tai Wo Hau MTR stations, according to data from JLL. At the reported compensation, Goodman is paying the equivalent of HK$3,086 per square foot for the property.
Completed in 1977, the 15-storey building also sits about 550 metres (601 yards) from Goodman’s existing logistics centre on Castle Peak Road, and is less than 5 kilometres (3 miles) from the ATL Logistics Centre, where the group holds a 25 percent interest.
Should Goodman be able to gain ownership of the whole building, the property could qualify for plot ratio relaxation for redevelopment under Hong Kong’s Revitalisation Policy 2.0, with the site potentially useful for data centre, cold storage or other industrial uses, according to JLL.
“Kwai Chung is known to be a traditional industrial district and is well-connected to the rest of Hong Kong with a robust public transportation system, and a plethora of bus and minibus routes,” said Bill Chan, senior director and head of industrial services at Colliers.
Goodman had been among the unsuccessful bidders for a logistics site on Container Port Road in Kwai Chung which ESR won last month with a bid of nearly HK$5.26 billion, with that tender demonstrating confidence in the city’s industrial market among foreign investors, said Chan.
Aside from Goodman’s logistics facilities in and around Kwai Chung, the industrial-focused developer in February last year purchased the ground to fourth floors at the Seapower Industrial Centre in Kowloon East for HK$570 million.
Outside of Hong Kong, Goodman in May agreed to sell six logistics properties in the mainland cities of Chengdu and Wuhan to NWS Holdings, an infrastructure investment subsidiary of New World Development, for RMB 2.29 billion ($337.2 million)
Shop King Liquidation
Reportedly signed in July, the Kwai Chung deal represents a second major sale by the Tang family in just over one month. The transaction is taking place after the family – which has been
under pressure to liquidate their assets over the past two years – reportedly sold a residential building in Kowloon City to K&K Property for HK$1.14 billion in late June, or around HK$160 million less than what the Tangs had paid to acquire the property in 2017.
In May, the Tangs sold a pair of retail properties – one each at the Beacon Heights Shopping Centre and at Wai Ching Court in Kowloon – for a combined HK$129 million.
Within that same month, the family reportedly sold two units at the Centro-Sound Industrial Building in Hong Kong Island’s Shau Kei Wan for HK$55 million and took a loss of HK$33 million on the sale, according to local media accounts.