Confirmed: Hong Kong tower sells for record $6.7 billion
Frederik Balfour and Emma Dai
Li Ka-Shing’s CK Asset Holdings has agreed to sell its stake in The Center to CHMT Peaceful Development Asia Property for $HK40.2 billion ($6.7 billion), a record for a Hong Kong office tower.
The deposit will be paid in cash, according to a statement released on Wednesday to Hong Kong’s stock exchange by CK Asset after the market closed. The purchaser is a company incorporated under the laws of British Virgin Islands and is a special purpose vehicle set up specifically to undertake the acquisition. It is independent of CK Asset. The gain on disposal for CK Asset would be approximately $HK14.5 billion.
The deal is the latest to signal that Hong Kong’s red-hot property market shows no signs of slowing down. LVGEM (China) Real Estate Investment on October 12 announced the $HK9 billion purchase of a building from Wheelock & Co. – a record per-square-foot price for a commercial building in Hong Kong’s Kwun Tong area.
Earlier this year, Henderson Land Development paid $HK23.3 billion for the first commercial land to be sold by the government in the Central district in more than 20 years.
For CK Asset, which recently changed its name from CK Property, the proceeds would give the company funds to diversify away from its main real-estate business. CK Asset and affiliate CK Infrastructure Holdings earlier this year agreed to buy a German maker of smart meters for about €4.5 billion ($6.8 billion), building on the company’s expansion in infrastructure and energy.
73-storey tower
CK Asset’s properties, which include the Cheung Kong Center and Hutchison House, spanned about 1.6 million square metres as of June, with more than 80 per cent located in Hong Kong, according to the company.
The 73-storey building in the Central business district is the city’s fifth-tallest, according to the Skyscraper Centre. Hong Kong’s skyscrapers command the highest rents in the world, according to a report last month from Knight Frank, which said rental costs are more than four times higher than in Singapore. Rental growth will continue to be robust on an influx of mainland Chinese tenants, Knight Frank said.
News involving 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 $HK34.8 billion. At the time, ICBC denied the report, saying it didn’t engage in talks nor purchase the stake.
with Prudence Ho
