Hong Kong’s Kailong Group is making preparations for a life sciences project on a Kowloon site acquired more than two years ago, with the real estate fund manager announcing a partnership with EC Healthcare to develop a medical building anchored by the local clinic operator.
The facility in the core commercial district of Tsim Sha Tsui will encompass a lettable floor area of 103,000 square feet (9,569 square metres), the partners said Monday in a release. EC Healthcare aims to consolidate its clinics scattered across different buildings in Kowloon into the new location.
“We are excited to partner with a well-established medical group, EC Healthcare, and Asia Allied Infrastructure to build a purpose-built medical centre located at the heart of Tsim Sha Tsui in order to capture the growing demand for medical real estate in Hong Kong,” said Kailong CEO Ivan Ho.
For the medical building project, EC Healthcare will contribute capital of up to HK$275 million for a 30 percent stake, valuing the JV at HK$917 ($117 million). Kailong will hold 60 percent and Asia Allied Group the remaining 10 percent in the venture.
A joint venture of Kailong and Hong Kong-listed Asia Allied purchased the site on Cameron Road in a series of transactions in late 2019, including the acquisition of the On Lee Commercial Building at 37 Cameron Road for HK$448 million ($57.7 million) from Ma Ah-muk, known locally as the Minibus King, and the adjacent residential building at 35 Cameron Road for HK$650 million.
The project, located about five minutes’ walk from Tsim Sha Tsui MTR station, is expected to complete construction by the fourth quarter of 2024. EC Healthcare will enter into a lease for the entire building for an initial term of five years with an option to extend a further five years.
The combined site measures more than 7,500 square feet and extends from Cameron Street through to Granville Circuit. To secure front-and-back road access to the future medical building, the partners are in the process of buying up Wing Hing Mansion at 16 Granville Circuit, where acquisition of the remaining units is a precondition for fulfilment of the JV deal.
EC Healthcare provides medical care in Greater China at clinics offering a range of services from dentistry and aesthetics to obstetrics and cardiology.
“The medical building will become the centrepiece of our group’s premium medical and healthcare services in Hong Kong,” said Ada Wong, executive director, chief strategy officer and chief investment officer of EC Healthcare. “This strategic move underpins the group’s commitment to building up an enclosed healthcare ecosystem focused on high-quality customer services and reinforce the group’s leading position as a one-stop comprehensive healthcare and medical service provider.”
TST Preps for New Operations
Kailong’s medical office project is about 10 minutes by foot from another Tsim Sha Tsui redevelopment site where Lofter Group is working on a commercial project in a joint venture with BentallGreenOak and Schroders Capital.
Together with its global fund manager partners, Lofter is paying over HK$1.5 billion to acquire a set of properties at 31-37 Hankow Road, with plans to construct a 115,800 square foot project on the site, the redevelopment specialist announced in May.
The Tsim Sha Tsui area, which sits at the point of Kowloon peninsula closest to Hong Kong Island, has been hard-hit by the pandemic, with US developer Hines having picked up the Butterfly on Prat Hotel for HK$925 million last November for conversion to a co-living flagship to be managed by local residential operator Dash Living.
That hotel, which is located four blocks east of the Hankow Road project, had suffered from the same lack of visitor traffic that led Hong Kong’s Watsons chain of personal care stores to close its location next to the Star Ferry last October after more than 20 years in operation.