Local investors have purchased 15 retail and residential properties at the Kin Sun Building in Hong Kong’s rapidly redeveloping Sham Shui Po area for a total of HK$100 million ($12.7 million).
Six retail shops spanning 3,914 square feet (364 square metres) on the ground floor of the 12-storey block were snapped up by the Bridgeway Prime Shop Fund for HK$70 million, according to JLL, which brokered the sale. The nine residential units with a saleable area of 5,612 square feet were sold to Max Poon, founder of Owl Square Co-living, and Laurence Chan, chairman of AL Group Ltd, together with other related parties.
Bridgeway Prime Shop Fund Management is the first licensed financial institution in Hong Kong to focus on shop investments. The firm’s founder, former investment banker Edwin Lee, praised the six connecting corner shops with wide frontage at the junction of Yen Chow and Hai Tan streets as a “very rare” find in the neighbourhood just east of Cheung Sha Wan.
“With numerous residential redevelopment projects nearby, I am very optimistic about the price appreciation potential of this investment,” Lee said Monday in a release. “These shops are all sold subject to tenancies and all of the existing tenants are local retailers serving the community.”
Owl Swoops on Value-Add Job
Owl Square, which offers more than 300 residential units in 13 locations across Kowloon and Hong Kong Island, plans to convert the nine residential units into high-quality and affordable living spaces for young professionals.
Poon talked up the Kin Sun Building’s proximity to Sham Shui Po and Nam Cheong MTR stations, as well as the cultural buzz surrounding the area, which is home to large malls like V Walk, Dragon Centre and Golden Computer Centre.
“It is very convenient to travel to different parts of Hong Kong from the property,” he said.
Lydia Poon, senior director of Hong Kong capital markets at JLL, pointed to nearby residential projects led by builders like New World Development and Vanke as a likely catalyst to improve the tenant mix and boost rental yields at the 1963-vintage Kin Sun Building.
“Sham Shui Po is experiencing huge transformation and undergoing active gentrification,” said Poon, who concluded the transactions for the properties.
Lee said the six newly purchased shops provide a passing yield of 3 percent, a figure he predicted could rise to an attractive 5 percent once the large residential projects are completed.
Kowloon’s Hot Corner
Situated in Kowloon’s northwestern corner, Sham Shui Po and Cheung Sha Wan have lured investors and developers keen to redevelop ageing properties into modern buildings with ready access to mass transit.
In 2020, local builder Chinachem shouldered aside 16 other bidders to win a URA residential site at the intersection of Tonkin Street and Fuk Wing Street in Sham Shui Po for HK$912.8 million ($118 million), with plans to develop 175 flats ranging from 377 to 670 square feet.
In Cheung Sha Wan, which connects Kowloon and the New Territories, New World acquired all three development sites made available through government auctions in 2017, spending a total of HK$15 billion to buy land in the area, including a site that became the 28-storey commercial tower at 888 Lai Chi Kok Road.