New World Development's nearly HK$1.3 billion purchase of the old Causeway Bay building may be rebuilt into a commercial complex

Financial Associated Press (Shanghai, editor Zhou Xinyang) news, in recent years, the consortium actively acquired the old buildings in the causeway Bay Russell Street, Persian Street and Lee Yuen Hill Road junction area, there is a new trend. According to Hong Kong media reports, there are rumors in the market that New World Development (00017) has just purchased some properties in the area for HK$1.28 billion, with a price of more than HK$100,000, equivalent to about HK$950,000 per square meter.

The latest property transfers include Ying Kee Tea House (08241) and 4 floors and 16 residential units auctioned by individual investors, representing a total of more than 20% of the ownership of the lot. The transaction allows New World to hold more than 80% of the ownership rights in the lot, reaching the threshold of a strong auction, and it is expected that New World is expected to accelerate the completion of the acquisition. The market estimates that New World will merge with the surrounding old buildings to form a commercial complex with a total floor area of about 33,300 square meters.

Forced auctions are compulsory auctions, also known as compulsory sales, a public policy adopted by the Hong Kong SAR Government in 1999 to improve the efficiency of the acquisition and reconstruction of elderly buildings, and the auction threshold has been reduced from 90% when it was first promulgated to 80%.

Title increased to more than 80%.

The latest properties include 72 Bosford Street Underground, 74 Perspos Street (front) Underground, 23 Lee Gardens Hill Road and 25 Lee Garden Hill Road (partial) underground, as well as 16 residential units involving a total saleable area of approximately 1,344 square metres and a transaction price of HK$1.28 billion, equivalent to HK$952,400 per square metre.

According to the information, the newly changed properties are owned by the Chen family of Ying Kee Tea Estate and two senior shop investors, who commissioned JLL to conduct a joint sale in August this year, with a total market value of about 1.8 billion yuan. At present, the final transaction price is 1.28 billion yuan, which is 520 million yuan or 28.9% lower than the market value.

Located in the heart of the heart of The Causeway Bay in Hong Kong, between Times Square and Hysan Place, the old building at the junction of Russell Street, Bossford Street and Lee Yuen Hill Road is bustling with people, and New World began its acquisition operations as early as 2013. However, as the shops in this lot were extremely valuable during the peak retail period, and the shop owners were also developers and heavyweight investors, the consortium has been concentrating on acquiring residential units upstairs for many years. Until now, the acquisition has reached more than 20% of the ownership, and it is reported that New World has increased its holdings to more than 80% of the ownership rights, which can start the unified ownership of the strong auction.

At present, the owners who still hold the land in this lot include Emperor International (00163) and "Minibus King" Mayam. Among them, the basement of 76 Persford Street, owned by Emperor International, was purchased for HK$380 million in 2011, with a practical price of HK$844,400, once the most expensive shop in Hong Kong.

Mayam is the founder of Guan Wing Car Dealer, the largest private line minibus operator in Hong Kong, and is known as the "King of Minibuses" because he has the most private line minibus routes and minibuses. Mayamu holds 3 titles to the site, and the Mayam family is open to selling the shops.

It is expected that the Grade A commercial building will be rebuilt

Market sources said that New World already holds more than 80% of the property rights at 54 to 68 Persia Street and 5 to 19 Lee Gardens Hill Road, and can start a strong auction at any time, but New World still hopes to include 60 Russell Street, 70 to 76 Perspos Street and 21 to 27 Lee Gardens Hill Road into the scope of redevelopment, so it has been waiting for the opportunity to increase the ownership. The biggest obstacle to the successful lifting of the acquisition is expected to accelerate the pace of reconstruction.

It is understood that the entire reconstruction site covers an area of about 2222 square meters, which is conditional to be built into a comprehensive commercial project integrating Grade A office buildings and retail, and it is estimated that the total floor area can be built is about 33,300 square meters.

Zhang Yichu, Managing Director of Hongliang Consulting and Valuation, pointed out that in the current market conditions, the consortium still proposes to acquire shops and residences for more than HK$100,000, which is a fairly ideal price. Due to the good location of the site, in the past, when the retail market was booming, the landlord tended to collect the rent of the shop instead of selling, but now the vacancy rate of the shop is high and the rent has fallen sharply, so they intend to put the market, providing a rare acquisition opportunity for the consortium.