Swire Group Sells Hong Kong Luxury Project to Fund for $128M

Swire Group has sold a luxury housing compound on Hong Kong’s Peak for HK$1 billion ($128.3 million), in what has been tallied as the city’s most expensive luxury property deal so far this year on a per square foot basis.

According to Land Registry data, a private unit of the Hong Kong conglomerate sold Cameron Lodge, which currently contains three luxury bungalows, to Hong Kong Better Roots Fund Ltd, a Hong Kong company controlled by a mainland national named Feng Jiyong. The deal which closed on 7 December, was agreed to in November or just two months after Swire had received planning permission to redevelop the plot into a new luxury project.

“The disposal is in line with the Group’s strategy of reducing exposure to non-core assets and recycling capital to focus on new opportunities,” a Swire representative said in a statement, noting that the disposal was made by John Swire & Sons (H.K.) Limited.

The sole director of Hong Kong Better Roots Fund bears the same name as Feng Jiyong, a Beijing-based partner with Zhong Lun Law Firm who specialises in private equity and investment funds, among other areas. Mingtiandi reached out to Feng for comment but had not received a response by time of publication.

Peak Values Hold Up

In its September planning approval, Swire had won permission to redevelop the Cameron Lodge site at 5 Mount Cameron Road into a pair of two-storey, detached bungalows measuring a total of 10,589 square feet (983.7 square metres).

The transaction values the property overlooking Wanchai near Middle Gap Road at around HK$94,446 per square foot of floor area, which would be the most expensive site this year on per square foot basis, according to media reports citing Land Registry data.

“The transaction amount for Cameron Lodge fell on the high side under the current market conditions,” said Alex Leung, senior director at CHFT Advisory and Appraisal, who pointed to the sale of a home at Sun Hung Kai’s Twelve Peaks project on Mount Kellett Road in January for around HK$91,252 per square foot.

During 2022, homes in the Peak and Island South, Hong Kong’s most expensive residential locations, have sold for prices running from HK$74,000 to HK$108,300 per square foot, Leung said.

Swire Shifts Gears

Records from the Hong Kong Land Registry show that John Swire & Sons had acquired Cameron Lodge from Swire Pacific in 2006 for HK$195 million after the listed sister firm had acquired the site from HSBC for HK$81 million in 1993.The banking giant had first acquired the plot for HK$70,000 in 1940.

Records indicate that the current set of three, four-bedroom bungalows, which are accessed by a private drive and share a swimming pool were first developed in 1985. A senior director of Swire is said to occupy one of the three homes, which combined measure 10,518 square feet.

Swire Group has made a number of asset sales in Hong Kong in the last two years as it continues to launch new projects in mainland China and the SAR.

In October the company confirmed plans to sell a warehouse in Hong Kong’s Tsing Yi area, with sources indicating that the company could take in HK$1.08 billion from the industrial sale.

Its Hong Kong-listed Swire Properties unit saw revenues drop by 26 percent during the first half of 2022, after selling nearly $1.9 billion in investment properties during 2020 and 2021.

With Swire Pacific’s Cathay Pacific unit continuing to struggle with the city’s travel restrictions, Swire Properties has continued to take on new projects, including paying HK$1.96 billion ($249.9 million) in June to pick up a residential site on Queen’s Road East near its Pacific Place complex.

Last week it renamed its 46-56 Queen’s Road East office project, which is currently in the pre-leasing stage, as 6 Pacific Place.

In October the developer announced plans for a $6.4 billion retail joint venture in China’s Hainan province, after signing a deal for a mixed-use project in Shanghai during September.

Swire’s latest disposal came against a backdrop of slow sales for detached homes in Hong Kong, with data from property agency Centaline showing that transactions in the segment hit a twelve-quarter low of 107 transactions in the three months ended September, after 105 such deals were recorded in the protest-marred third quarter of 2019.