Canada’s Manulife

Canada’s Manulife Among Buyers In HK$9.8b Cityplaza One Deal

HONG KONG – The sale of Cityplaza One in Taikoo for HK$9.8 billion (approx. US$1.26 billion) has been completed during 2020’s last days, reported Mingtiandi on Sunday (3 January).

According to an announcement made on 30 December, the 21-storey office tower changed hands for over HK$7.27 billion in cash and 2,200 consideration shares.

The conclusion of the largest building transaction in the Chinese territory last year also uncovered the biggest investor in the deal, with Canadian insurance firm Manulife subsequently reaching an agreement with Gaw Capital Partners to join the consortium as the biggest single investor.

In early November, funds overseen by Schroder Pamfleet and Gaw Capital Partners signed the contract to purchase the commercial property from Swire Properties. Manulife joined the consortium of buyers later.

“We are very excited to partner with Gaw Capital and other investors on this prime investment. Despite some of the headwinds resulting from the pandemic, we are continuing to focus our expansion efforts on high quality assets across major markets in the Asia Pacific region, which are supported by strong long-term macro and demographic prospects,” said Manulife’s Head of Asia property investments Kenny Lam.

The investment by the consortium, which also includes mainland Chinese insurer BOC Life, represents one of the few major commercial property transactions in Hong Kong that concluded last year, as the health crisis severely impacted the world’s most expensive property market.

Collectively, the consortium members now own the office tower measuring 628,785 sq ft after paying about HK$15,609 psf to get possession of the commercial property built in 1997.

“We are pleased to be part of the consortium partners, and joined hands with Gaw Capital and other investors in this acquisition. It is a great investment opportunity with high growth potentials in the long run,” said BOC Life’s CEO Wilson Tang.

BOC Life, together with Manulife, Schroder Pamfleet, and Gaw Capital Partners have made a massive office investment despite the bleak prospects of Hong Kong’s office rental market for 2021.

In fact, the amount of occupied office space in the Chinese territory contracted by over 2.5 million sq ft last year, based on estimates by property consultancy JLL. Nonetheless, Hong Kong island’s eastern part, which encompasses Taikoo area where Cityplaza is located, is more resilient than other office markets there.

But due to record losses of its airline division Cathay Pacific, Swire Properties sold Cityplaza One for 19 percent less than what it managed to obtain when it divested Cityplaza Three and Cityplaza Four in 2018 to a group of investors that also counted Gaw Capital Partners among its ranks. Consequently, funds managed by Gaw Capital Partners now own a stake in Cityplaza One, Cityplaza Three, and Cityplaza Four.

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