Henderson Land and Swire Properties are set to expand the Taikoo Place commercial cluster in eastern Hong Kong island after acquiring the majority of an aging residential building adjacent to the Quarry Bay development.
Within the last two weeks a joint venture between the pair of blue-chip Hong Kong developers has acquired 20 units in Tor Po Mansion in Quarry Bay for a sum of approximately HK$182 million, giving the property titans the right to bid for the compulsory sale of the remaining space in the 56-year-old residential block just north of Taikoo Place on King’s Road, the primary commercial thoroughfare in the community.
The union between Henderson Land, one of Hong Kong’s largest developers, and Swire Properties, the biggest landlord in Quarry Bay, has also been busy purchasing units in another aging building on the same block, signaling the possibility of adding a new commercial development in the district as Swire’s one million square foot Two Taikoo Place begins to rise from a very large whole in ground some 200 metres away.
Buying Up a Block Next to Taikoo Place
According to information from Hong Kong’s Land Registry, three units at Tor Po Mansion were recently acquired by Legend Lasting Limited, a joint venture in which Henderson Land and Swire Properties hold 51 and 49 percent stakes respectively, for prices ranging from HK$6.61 million to HK$6.99 million. This latest set of units are understood to have taken the joint venture beyond the 80 percent holding threshold necessary to file for a compulsory sale of the remaining space.
That trio of acquisitions comes after the same JV paid approximately HK$162 million to acquire 17 units in the building directly across King’s Road from the entrance to the Quarry Bay MTR station in a single day. The developer duo paid prices of from HK$3.55 million to HK$7.98 million for each of those properties, at prices equivalent to HK$18,000 to HK$20,000 per square foot.
Located at the intersection of King’s Road, Hoi Kwong Street and Hoi Hong Street in Quarry Bay, Tor Po Mansion, occupies a 28,000 square foot (2,601 square metre) site. Although currently designated as residential, the property is believed to have potential for conversion into a commercial development that could yield up to 400,000 square feet of new space.
Henderson Land is said to have kicked off the acquisition of pieces of the walk-up building in 2014, with Swire beginning its own take-over strategy the next year. In traditional Hong Kong fashion, the competing parties subsequently joined together to manage bidding for the remaining units in the building.
In recent days Sunshine Sail Global Ltd, another joint venture between Henderson Land and Swire, has paid a total of HK$29.15 million to purchase three units in the Tai Fung Building, which occupies the same block as the Tor Po Mansion and is directly across a small lane from the King’s Road entrance to Taikoo Place.
Expanding Quarry Bay Cluster
Henderson and Swire are making progress on their acquisitions on the block north of Taikoo Place just a few months after receiving approval for a redevelopment project directly to the south of the commercial cluster.
In May of this year, another joint venture between the pair of developers won approval to develop a commercial project of up to 650,000 square feet on a 44,000 square foot site at the intersection of Pan Hoi Street and King’s Road, which Henderson and Swire had assembled through a series of acquisitions which culminated in a 2018 compulsory sale.
The Quarry Bay area in Hong Kong island’s eastern district has gained in popularity as a business hub in recent years, with corporates including Facebook and JLL having chosen Swire buildings in the area as an alternatives to Central’s world-leading office rents. Earlier this year the developer turned over to tenants its one million square metre One Taikoo Place project, with the building’s twin, Two Taikoo Place targetting a 2021 completion date.