Following initial reports last month, The Center, an iconic skyscraper in Hong Kong’s Central district, has been sold for HKD 40.2bn (approx. USD 5.15bn). The stunning 80- storey office tower has 1.2m+ sqft of office space, 13,000 sqft of retail and 400+ parking spaces. The building sees Hong Kong’s richest man, Li Ka Shing, continue to divest some of his core real estate holdings. The price for the building equates to c. HKD 33,000 per sqft (or around USD 45,850 per sqm), making it Asia’s largest single en-bloc transaction. The building has been acquired by CHMT Peaceful Development Asia Property Ltd, incorporated in the BVI, which is consortium led by Hong Kong businessmen in conjunction with a key mainland Chinese company.
While China continues its crackdown on outbound overseas investment, especially in the real estate and entertainment sectors, there is still strong demand from mainland Chinese investors to get a slice of the Hong Kong market. However, while occasional headline deals are being done, the crackdown has created uncertainty and has resulted in many mainland Chinese groups withholding their interest from certain en-bloc or development transactions.
Hong Kong continues to be an attractive market despite its high pricing. While yields may be tight, it remains one of the worlds most hotly contested real estate markets, acting as both a conduit for outbound and inbound capital across the region and globally.