Hong Kong’s CK Asset to sell office tower for record US$5bil
HONG KONG: CK Asset Holdings Ltd, owned by Hong Kong’s richest man Li Ka-shing, is selling its 73-storey office tower to C.H.M.T. Peaceful Development Asia Property Ltd for HK$40.2bil (US$5.15bil), the city’s biggest property deal.
The Hong Kong skyscraper’s sale is a record-breaking deal and expands the footprint of Chinese investment in the Asian financial hub’s prime office district, where half of new leasing space has been snatched up by mainland Chinese companies.
Shares in the company jumped as much as 4.6% yesterday, their biggest intraday percentage gain since July 2016. They have risen more than 40% this year, outpacing a 30% gain in the broader market.
The buyer is a British Virgin Islands-incorporated company, while 55% of the investment in the deal comes from China Energy Reserve and Chemicals Group, according to local media, with the rest from Hong Kong investors.
“The selling price is reasonable ... it’s a positive signal to the market and I expect we’ll see more large transactions of office buildings in Q4,” said Tom Ko, executive director of real estate consultant Cushman & Wakefield.
Ko said he expected high-value purchases would be mostly by Chinese investors as they usually buy for self-use purposes, making them more willing to bid aggressively, while local investors would focus on land and redevelopment opportunities.
CK Asset said it expected to record a gain of about HK$14.5bil from the sale of its 75% stake in The Center, the fifth tallest in Hong Kong.
The proceeds would be used for general working capital purposes, it said in a filing with the stock exchange on Wednesday.
The deal comes after mainland developer LVGEM (China) Real Estate Investment Co Ltd said in October that it would buy an office tower from Wharf (Holdings) Ltd for HK$9bil to strengthen its presence in Hong Kong property.
Chinese firms have been expanding aggressively in Hong Kong property, one of the world’s most expensive real estate markets, buying 29% of residential land sold in 2015 and 2016.