CSI Properties has completed the purchase by compulsory sale of a building in Hong Kong’s Sheung Wan area that is home to the sole surviving branch of the Lin Heung Tea House, one of the city’s most famous dim sum restaurants.
The developer had to pay HK$23 million ($3 million) to acquire the remaining flat in the Tsang Chiu Ho building on Wellington Street, a rate more than three times the HK$6.92 million estimated last year when the compulsory sale application was submitted.
The purchase brings the Hong Kong-listed developer’s ownership of the 1930s-era property to 100 percent, putting it in a position to redevelop the 4,206 square foot (391 square metre) commercial site into a new project of up to 63,000 square feet.
The acquisition comes at a time when non-residential transactions over HK$100 million fell by 50 percent in Hong Kong for the first five months of this year compared with the same period last year, according to Savills.
Buying the Last Piece of the Investment Jigsaw
CSI Properties paid HK$60,686 per square foot for the 379 square foot (35.2 square metre) flat on the fifth floor – 232 percent more than the estimated value of the property – to add the final piece of the investment jigsaw.
Last year, the developer had acquired 37 residential units at the address for a combined HK$357 million from individual sellers, according to local media.That set of purchases brought the developer’s ownership of the property to 98 percent, well above the 80 percent threshold for a compulsory sale.
Four years ago the developer had spent an initial HK$170 million, or HK$31,600 per square foot, to acquire Lin Heung Tea House’s premises on the ground and first floor from the building’s then-owner Tsang Chiu Ho.
With redevelopment on the way the Lin Heung Tea House is expected to depart Sheung Wan where it has been an institution for nearly four decades, with the restaurant having recently enjoyed a surge of customers keen to visit for a final feast of char siu bao and siu mai in the restaurant’s 1960s-decorated setting.
Sheung Wan Rents Steady
The property is directly opposite 158-164 Queen’s Road, which is currently being developed into a commercial tower by local investors, according to market sources.
A four-minute walk from Sheung Wan metro station and 300 metres from The Center at 99 Queen’s Road, the property is in a commercial and retail area that has seen rents remain firm at the same time that average grade A office rents across the city fell 0.3 percent between April and June.
Average rents in Sheung Wan climbed 0.4 percent to HK$84 per square foot per month in the second quarter compared to the first three months of the year, which may account in part for the three HK$500 million-plus transactions that have been recorded in Sheung Wan since April.
Last month, Mingtiandi revealed that co-living start-up Weave was acquiring a serviced apartment complex at 123 Queen’s Road West in the district for HK$585 million, paying the equivalent of HK$ 16,076 per square foot of gross floor area for the 36,389 square foot (3,381 square metre) property.
That deal was preceded by Emperor International’s HK$595 million purchase of 151 Hollywood Road from Blackstone six weeks ago, which saw the Hong Kong developer paying $HK$18,181 for the 32,727 square foot commercial property
Two months ago, Hong Kong-based Arch Capital bought a 32-storey commercial building on at 69 Jervois Street for HK$1.9 billion, paying $18,595 for the 102,177 square foot tower.