
HKRI is expected to redevelop the United Daily News Centre
A 16-storey industrial building in Kowloon’s To Kwa Wan area has changed hands at HK$310 million ($40 million) as hopes for an end to the pandemic rekindle Hong Kong’s dormant real estate investment market.
Hong Kong Resorts International, a developer controlled by the city’s Cha family announced to the Hong Kong exchange on 8 December that it has agreed to purchase the United Daily News Centre at 21 Yuk Yat Street shortly after the closing of a public tender for the building near the former Kai Tak airport site.
The deal comes as governments around the world have begun approving vaccines which promise to end the COVID-19 pandemic in the coming months, with investors expecting that Hong Kong’s investment market will gradually recover next year. During the first nine months of 2020, transaction values of investment properties in the city fell by 62 percent compared to the same period one year ago, according to data from Real Capital Analytics.
Hong Kong Tycoons Aim at Redevelopment
HKRI, which is known as the developer of Hong Kong’s Discovery Bay, is expected to redevelop the current 62,577 square foot (5,814 square metre) building on the site into a new complex, which would allow for residential, commercial or combined use. At the consideration declared, the company is paying the equivalent of HK$4,954 per square foot for the property, which occupies a 5,805 square foot site.

HKRI chairman Victor Cha
The seller of the property is a company controlled by Wang Pi-Ly, a son of the founder of the United Daily News, Taiwan’s third-largest newspaper. The seller had acquired the building in 1987 for HK$11 million, and the United Daily News had operated a newspaper from the building from 1992 through 1995. In recent years the tower has been leased out for office use, earning after tax income of approximately HK$5.5 million per year, according to a statement from HKRI.
“The acquisition can help enhance and enlarge the property investment portfolio of the Group, hence increasing the rental revenue base and is in line with the Group’s business strategy,” HKRI noted in its statement to the exchange.
Under the leadership of the late Payson Cha, who passed away last month, the Cha family has been active in redeveloping properties around Hong Kong, primarily through Hanison Construction Holdings, an HKEX-listed developer now chaired by Johnson Cha, the younger brother of HKRI chairman Victor Cha.
Kowloon Reconstructs
Located on a corner lot one block inland from Kowloon Bay, HKRI’s To Kwan Wan acquisition overlooks Victoria Harbour and is less than half a kilometre (a third of a mile) from the former Kai Tak airstrip which has been a centre of redevelopment activity in Hong Kong.

Cushman & Wakefield executive director Tom Ko
HKRI’s new prize is also around two kilometres north and east of where the company’s competitors at Henderson Land Development have been gradually buying up old buildings to assemble a one million square foot commercial and residential project in the Whampoa area of Kowloon.
“This is one of the few en-bloc opportunities in this part of Kowloon,” said Tom Ko, an executive director with the capital markets team at Cushman & Wakefield in Hong Kong, which managed the sale of the property. “This area has become a centre for redevelopment,” he added. “To Kwa Wan will be connected to Tsim Sha Tsui along the promenade, and you can jog from there to Kai Tak.
The Kai Tak area is the centre of a 14.4 million square foot government development project, with developer China Overseas Land & Investment having agreed to pay HK$4.27 billion for a residential project on the former airstrip earlier this month.
Buyers Becoming Eager
Ko sees the To Kwa Wan deal as part of a thawing in Hong Kong’s investment market as local buyers anticipate a potential end to discounts once overseas funds and mainland corporates regain access to the city once the COVID-19 pandemic is under control.
Despite rising office vacancy and a drop in retail sales, owners of Hong Kong assets have resisted lowering asset values this year as potential buyers have asked for discounts of 20 percent or more in the world’s most expensive property market.
Since Pfizer and other pharmaceutical firms began announcing promising vaccine candidates in early November, Hong Kong’s investment market has begun to show signs of recovery. In November, a joint venture between fund managers Gaw Capital and Schroder Pamfleet agreed to buy the Cityplaza One office tower in Taikoo for HK$9.84 billion, and Sun Hung Kai Properties’ disposed of the retail podium in its Downtown 38 residential complex in Ma Tau Kok for HK$300 million.
“A golden window for local investors is closing in the next six to 12 months,” Ko said. In a report released on Wednesday, Cushman & Wakefield predicted that trades of commercial and industrial properties in Hong Kong would exceed 2019 levels in the new year.
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