Record $5.2bn sale of The Center shows Hong Kong commercial property market still hot
Hong Kong — Li Ka-Shing’s CK Asset Holdings agreed to sell its stake in The Center for HK$40.2bn ($5.2bn), setting a record for a Hong Kong office tower and showing that the city’s commercial property market remains red hot.
CK Asset’s gain will be about HK$14.5bn, the company told Hong Kong’s stock exchange late on Wednesday.
State-owned China Energy Reserve and Chemicals Group owns 55% of the purchaser, with Hong Kong individuals accounting for the rest, local media reported.
The deal suggests that September’s scrapped sale of the Excelsior hotel in Causeway Bay was an exception, rather than a sign of a cooling market.
LVGEM (China) Real Estate Investment last month announced the HK$9bn purchase of a building from Wheelock.
Earlier this year, Henderson Land Development paid HK$23.3bn for the first commercial land sold by the government in the Central district in more than 20 years.
The Center sale gives CK Asset, which has changed its name from CK Property, extra cash as it diversifies away from its main real-estate business.
CK Asset and affiliate CK Infrastructure Holdings agreed earlier this year to buy a German maker of smart meters for about €4.5bn, building on the company’s expansion in infrastructure and energy.
CK Asset’s properties, which include the Cheung Kong Center and Hutchison House, spanned about 1.6-million square meters as of June, with more than 80% located in Hong Kong, according to the company.
The 73-storey tower in the Central business district is the city’s fifth-tallest, according to the Skyscraper Center.
Hong Kong’s skyscrapers command the highest rents in the world, according to a report from Knight Frank, which said rental costs are more than four times higher than in Singapore.
Rental growth would continue to be robust on an influx of mainland Chinese tenants, Knight Frank said.
News on the sale of The Center has been trickling out for at least a year, with the Hong Kong Economic Journal saying last year that ICBC Asia approached CK Asset about buying the stake in the tower for HK$34.8bn. At the time, ICBC denied the report, saying it did not engage in talks nor purchase the stake.
In the deal announced on Wednesday, the purchaser, CHMT Peaceful Development Asia Property, is a British Virgin Islands special purpose vehicle set up for the acquisition.