Cityplaza One Office Tower Changes Hands For HK$9.84b
HONG KONG – The 21-storey CityPlaza One office tower in Hong Kong island’s eastern district is being purchased by a consortium led by fund managers Schroders Pamfleet and Gaw Capital Partners for slightly over HK$9.84 billion (US$1.27 billion), reported Mingtiandi on Monday evening (9 November, SGT).
The seller is Swire Properties, the real estate arm of Swire, whose Cathay Pacific has been badly affected by the COVID-19 pandemic, forcing it to let go about 6,000 airline workers.
The deal represents the biggest acquisition of a completed property in Hong Kong so far this year. Despite the city’s currently sluggish office leasing market, the consortium is buying the commercial property as its executives are bullish on the outlook of Hong Kong.
“CityPlaza One is a well-located, well-managed property that represents an opportunity to participate in the long-term favourable economic outlook for Hong Kong,” said Schroder Pamfleet’s Head of Asia (excluding China), Allan Lee.
“There are many reasons to be optimistic about Hong Kong’s prospects, including the 60 or 70 IPOs in the pipeline and the real work that is being done on integration with the Greater Bay Area,” noted Schroder Pamfleet’s Head Andrew Moore.
Under the deal, the consortium will acquire the entire stake of the firm that owns the 58,416 sq m (628,785 sq ft) office tower that was completed in 1997 via versatile payment terms that values the commercial property at HK$15,609 psf.
However, this rate translates to a discount of about 18 percent based on Swire’s divestment of CityPlaza Three and Four to China’s Hengli Investments Holding and Gaw Capital in 2018.
Specifically, the consortium agreed to pay a 9.95 percent down payment upon inking the deal. Thereafter, it will fork out 83.4 percent of the overall selling price in cold cash, with the option to pay the balance via stocks of the company that owns CityPlaza One. The remaining interest of slightly above 5 percent shall be deferred for 3 years after the conclusion of the transaction.
“Following the purchase of portions of CityPlaza Three and CityPlaza Four in 2018 and 625 King’s Road in 2019, we are delighted to have signed the sale and purchase agreement (SPA) on Monday for the purchase of CityPlaza One,” said Goodwin Gaw, Chairman & Managing Principal of Gaw Capital Partners.
In 2019, a fund managed by Gaw Capital paid HK$4.75 billion to buy the 26-storey 625 King’s Road tower in Hong Kong’s North Point area from China Motor Bus Company and Swire Properties.
In July 2020, Swire Properties also disposed 2 office buildings in Miami for a total of US$163 million.