Hong Kong’s Nexxus Bldg Open For Offers
HONG KONG – A number of real estate agents revealed that business tycoon Eric Chu’s remaining commercial properties in the city, including the Nexxus Building in the heart of Central and two other commercial assets there, are available for offers, reported the South China Morning Post (SCMP) on Tuesday evening (22 August, SGT).
This comes after the business mogul’s wife, Truong My Lan, was arrested in Vietnam in October 2022 for allegedly appropriating trillions of dong as well as cheating in the issuance and trading of bonds.
Notably, Chu has been selling he and his wife’s Hong Kong commercial properties at a steep discount over the past few months. In June, he divested a hotel in Tin Hau at nearly half the price he paid for it in 2017, based on official documents. During the same month, he sold an under-construction mixed-use development in Quarry Bay for HK$412 million to local real estate developer Wang On Properties. That price is significantly less than the HK$678 million he reportedly paid for the property in 2018.
The couple started actively investing in Hong Kong’s real estate market in the mid-2000s, purchasing high-end homes on The Peak to office buildings. Now they’re doing a fire sale amidst a local commercial property market that is at its worst state in almost 10 years.
As a matter of fact, there are several other distressed properties available on the market that are struggling to find buyers. For example, the creditors of China Evergrande Group have yet to find a buyer for the indebted developer’s Hong Kong headquarters nearly a year after seizing the office building. Real estate mogul Chen Hongtian’s One HarbourGate East Tower in Hung Hom was also recently launched for sale by a creditor that had seized the asset.
Although Eric Chu’s fire sale of his Hong Kong commercial assets is likely due to the family’s financial problems, the low selling prices threaten to further dampen sentiment in the city’s already sluggish commercial real estate sector.
According to property consultancy Colliers, prices of office buildings in Hong Kong have plunged by around 35 percent from its peak in 2018. The overall office vacancy in the city also reached nearly 15 percent at the end of Q2 2023, which is over three times the rate seen in 2019. But amidst rising interest rates along with more incoming office supply, property investors have little appetite to acquire Hong Kong office buildings.