Richard Li’s Pacific Century Premium Developments (PCPD) has agreed to pay HK$2 billion ($256 million) to a company run by a former associate of the second-generation tycoon in return for ownership of a prime housing site in Hong Kong’s Central district, according to an announcement today to the Hong Kong stock exchange.
Under the terms of the joint venture, Hong Kong-based PCPD, which is controlled by the younger son of tycoon Li Ka-shing receives 100 percent ownership of the project company which owns the land in the city’s Mid-levels area, and the right to jointly redevelop the property in the upscale residential neighborhood with CSI.
The partners intend to transform the project just uphill from the city’s financial hub into a high-end predominantly-residential building, unless the zoning of the site can be successfully changed to commercial, said PCPD in a filing to Hong Kong’s Stock Exchange. In return for selling 100 percent of the project equity to PCPD, CSI Properties will receive HK$2.02 billion in cash, and half of the future profits of the project, according to a press release from the company.
Developers Team Up for Prime Central Home Site
“The uniqueness of the site makes the site ideal for redevelopment into a masterpiece premium residential tower,” Mico Chung, chairman of CSI said in the statement. Chung added that the synergies from the partnership will help to extract the maximum potential from the prized location in the city’s Central district.
The site, 3-6 Glenealy, covers an area of 11,700 square feet (1087 square metres), and is approved for construction of up to 102,000 square feet (9476 square metres) of floor area. The price works out to around HK$20,000 per square foot of buildable floor area. CSI acquired full ownership of Yuen Lam Mansion on 3-4 Glenealy for HK$630 million in late 2014. It is unknown when the property developer purchased 5-6 Glenealy.
CSI Specialises in Central
The Glenealy project is the latest in a series of Central undertakings for Hong Kong-listed CSI and its well-connected chairman. The 14-year-old developer is also developing a HK$15 billion (US$1.9 billion) project at Graham Street in the district, through a joint venture with Wing Tai Properties.
The company, which declared total assets of HK$23 billion as of March 2017 also purchased 18 office floors, ground-floor shops and the rooftop of the Oriental Crystal Commercial Building on Lyndhurst Terrace in Central for HK$700 million in 2016 year-end. CSI also has two commercial redevelopment sites on Shelley Street and Cochrane Street under construction in the same district.
Former Li Employee Becomes New Business Partner
The property developer’s chairman Mico Chung was a right-hand man to Richard Li in PCCW before he left in 2003 to join the property company a year later. Chung served as an executive director at PCCW and was responsible for merger and acquisition from 1996 to 2010. He is currently a non-executive director at HKT, a telecommunications service provider under PCCW.
Pacific Century Premium Developments (PCPD), the real estate arm of Richard Li’s PCCW, bid the $7.8 billion Meridian Water project in London that is expected to deliver 10,000 homes in November. The Glenealy project is Li’s first new real estate undertaking in Hong Kong in a decade.