Schroders Marketing Hong Kong Mall at 20% Below 2017 Purchase Price

Schroders has launched a sale campaign for a third Hong Kong asset in four months, with market sources confirming that the London-based fund manager is asking HK$1.6 billion ($210 million) for the Worfu mall in North Point.

Schroders teamed with UK real estate firm Chelsfield in late 2017 to acquire the property at 21-53 Wharf Road, then known as Provident Square, from HKEX-listed Fortune REIT for HK$2 billion. After carrying out renovations from 2019 to 2021, the owners are marketing the community mall on an as-is basis with existing tenancies via a public tender, according to sole agent CBRE.

Worfu comprises 210,000 square feet (19,510 square metres) of gross floor area with 98 shops serving a middle-class neighbourhood of Hong Kong Island. The retail asset benefits from one of the island’s strongest catchments in terms of median household income, said Barry Chung, CBRE Hong Kong’s head of client care.

“Worfu is surrounded by a mature estate with a higher-than-average domestic household size which fuels demand,” Chung said. “The purchasing power in the North Point area is immense (and) there is also a significant working population and students.”

Dealings With Superman

Fortune REIT had picked up the 1982-vintage mall in 2012 for HK$650 million. The trust controlled by CK Asset Holdings, the property flagship of billionaire tycoon Li Ka-shing, flipped the asset to Schroders five years later, when the UK firm’s Hong Kong operation was still doing business as Pamfleet.

The transaction marked the second time that Pamfleet had bought a Hong Kong shopping centre from Fortune REIT. In 2015, the listed trust sold Nob Hill Square, a mall in the industrial district of Kwai Chung, to the real estate investor for HK$648 million. Pamfleet put Nob Hill Square up for sale in 2018 with a HK$1 billion asking price.

The tender exercise for Worfu, at an indicated price of HK$7,619 ($979) per square foot of gross floor area, is scheduled to close on 21 February, with the owners counting on the attractiveness of the North Point shoreline’s new infrastructure projects, including a harbourfront boardwalk set to open to the public this weekend.

“We look forward to the public tender launch of this project as an opportunity to ride on the huge upside yet to be crystallised from all the recent developments from the malls surrounding,” CBRE’s Chung said.

More Assets for Sale

Schroders earlier this month put the third floor of the Harbourfront Landmark, a residential and commercial complex in Kowloon’s Hung Hom area, up for sale by private treaty. The space at 11 Wan Hoi Street has a gross floor area of 18,520 square feet and forms part of a commercial podium at the 2001-vintage development.

Sole agent JLL estimates the floor’s market value at HK$150 million ($19.3 million), marking a reduction from the asset’s HK$163 million opening bid price at an auction scheduled for last March but later called off.

In October, Schroders launched a fresh marketing campaign for a Kowloon residential block, with the firm offering the building at 176 Nathan Road in Tsim Sha Tsui at a third off of its HK$600 million purchase price eight years earlier. Savills and Knight Frank have been engaged to find a buyer for the Nate, a combined residential and retail complex in the bustling commercial district, for HK$400 million.