Mainland developer China Vanke on Thursday acquired a HK$580 million ($74 million) site in Hong Kong’s North Point neighborhood that is earmarked for a commercial or mixed-use development.
The company’s Vanke Property (Hong Kong) arm picked up the 4,300-square-foot (3,995-square-metre) site from a private company controlled by Alexander Law Sau Wang, of the family which owns Hong Kong developer Yu Tai Hing, in an off-market deal, according to a report by mainland news outlet Guandian.cn.
The site at 62-68 Chun Yeung Street is approved for the development of a retail and residential project spanning 43,000 square feet of gross floor area, equating to an acquisition price of about HK$13,500 per square foot. The site can also be developed into a commercial building of up to 64,500 square feet, amounting to roughly HK$9,000 per square foot of gross floor area.
Realty Asset Ltd, with Alexander Law listed as the soled director, had purchased 62-68 Chung Yeung Street in 2011 for HK$255 million, and reportedly had explored options to develop the site into either a commercial and residential property, a pure commercial building or a hotel. Vanke’s purchase marks an appreciation of HK$325 million in eight years.
Following the transaction Law’s name has been replaced as director of the asset’s holding company,by Cao Shu Kei and Sandick Pau, both senior officials with Vanke Property (Hong Kong), as directors of the privately-held vehicle. Law’s father, Lo Siu-tong is the chairman of Yu Tai Hing, with younger brother Dennis Law now serving as the firm’s managing director.
Yu Tai Hing, in addition to developing residential projects in Hong Kong, is also the developer of the One Mong Kok Road Commercial Centre in Kowloon.
Building on a Hong Kong Track Record
Vanke’s new site is located between Causeway Bay and Quarry Bay, blocks away from the waterfront and from the North Point MTR station in the northeastern part of Hong Kong Island. The neighboring area has given rise to numerous tenement redevelopment projects in recent years.
One block away from the newly traded site, Henderson Land Development launched its high-end residential project Novum Point at 3 Marble Road at the start of 2018, asking HK$25,370 to HK$30,284 per square foot for units ranging in size from 181 to 417 square feet.
Shenzhen-based Vanke has been active in residential development in Hong Kong in recent years. Le Pont in the Tuen Mun area, the company’s first wholly-owned Hong Kong residential development, has reportedly seen a strong response with its cheaper-than-average starting price of HK$9,878 per square foot.
In 2013, Vanke teamed up with New World Development on a successful bid for a waterfront site near Tsuen Wan West Station for HK$3.4 billion, which the partners developed into the residential complex The Pavilia Bay. Launched in January 2017 and completed in August of last year, the project has sold 980 units out of a total 983, according to Centadata.
Vanke has also supplemented its bidding activity with off-market land acquisitions. In 2014, the company bought 18 Lun Fat Street in Wan Chai, turning it into its first serviced apartment The Luna, which was launched early last year.