Tycoon Payson Cha’s Hanison Construction Holdings has picked up a block of serviced apartments in Hong Kong’s Sheung Wan neighbourhood for HK$506 million ($64.7 million), according to a report in the Hong Kong Economic Times. The purchase of the building just north of the SOHO entertainment area comes as the developer controlled by one of Hong Kong’s wealthiest families continues to bet on redevelopment projects in the city.
Hanison’s latest acquisition is the entire 25-storey Ovolo Sheung Wan serviced apartment building, which has 48 apartments covering 27,456 square feet (2,551 square metres). The 1995-vintage structure is located on Hollywood Road, just one subway stop west of the city’s Central commercial hub.
Sheung Wan Building Sees HK$208M Appreciation in 8 Years
The price that Hanison paid for its new asset is about five percent less than the HK$530 million that the previous owner, Mr S Sundar, had hoped for when the local investor put the property on the market in October of last year. Still, the seller, who was represented by JLL’s Raymond Fung, was able to achieve HK$18,429 per square foot for the property that he had originally purchased in 2010 for HK$298 million (then $38.4 million), as reported by local media.
Hanison has previously acquired two Ovolo-branded properties from the same seller, according to filings to Hong Kong’s Stock Exchange. In late 2016, the developer paid HK$341 million ($44 million) for the Ovolo West Kowloon Hotel in Sham Shui Po, which has since been shuttered.
Prior to that, in 2015 Hanison purchased the Ovolo 111 High Street serviced residence block in Sai Ying Pun for HK$253 million ($32.6 million) and later redeveloped it into a 22-unit serviced apartment property called One Eleven. Following the redevelopment, Hanison was able to raise rents in the project by 15 to 20 percent.
Hanison Chases Hong Kong Redevelopment Projects
Chaired by Payson Cha, who also controls Discovery Bay developer Hong Kong Resorts International, Hanison Construction has been active in en-bloc investments over the past year. The company sold the 29-storey Success Centre in the New Territories, which it jointly owned with Hong Kong-based private equity firm PAG, in December for HK$1.04 billion ($132 million). The joint venture earned a $30 million profit from the sale of the asset, less than a year after purchasing it.
Known for its redevelopment projects, Hanison put the 23-storey PeakCastle office tower on the market in June after repositioning the building, with a tentative asking price of HK$1.72 billion ($222 million). The asset has not been sold but is said to be close to selling, a source familiar with the sale told Mingtiandi.