Schroders Unloads Hong Kong Office Tower At Huge Discount
HONG KONG – Schroders, a UK-based multinational asset management firm, has divested an office tower in the city’s Mong Kok district in Kowloon for HK$350 million (US$44.8 million), reported Mingtiandi on Tuesday evening (18 January, SGT).
Known as HQ, the 15-level commercial property at 450-454 Portland Street stands on a 3,192 sq ft land plot.
With floor plates measuring between 2,213 sq ft and 3,171 sq ft along with flexible office unit sizes of at least 580 sq ft, the building has an area of around 38,228 sq ft. This means the selling price translates to HK$9,155 psf.
Previously, Pamfleet bought the Grade A office property for HK$349 million in 2015, before the Hong Kong-based property investment manager became part of Schroders in 2020.
After obtaining ownership of the office asset then known as Bing Fu Commercial Building, Pamfleet invested tens of millions of Hong Kong dollars to refurbish it. Renovation works included sprucing up the entrance and lobby, as well as repositioned the property to align with Hong Kong’s flourishing education sector back then.
Thereafter, Pamfleet put up HQ for sale for HK$780 million in 2019, before Schroders slashed the asking price to around HK$600 million in 2022.
While the acquirer’s identity has not been confirmed, the Hong Kong Economic Times stated that it’s local property investment company Vervain Resources (formerly known as Nan Fung Resources).
Built in August 1991, HQ currently has an office occupancy rate of about 95 percent. Tenants include educational companies and religious organizations Asking office rents begin from HK$44.61 psf per month.
Situated within the vibrant Prince Edward commercial hub, the colourful commercial property is just a stroll from the Prince Edward Metro Station.
The sale comes at a time when Kowloon’s office market is showing signs of hitting rock-bottom, while the reopening of Hong Kong’s border with mainland China is expected to boost office rental demand. The transaction is also seen as an indication of renewed interest in Hong Kong office properties after the reopening just over a week ago.
“In the short term, we expect Kowloon’s office submarket to remain weak, but see signs of it bottoming out,” commented Knight Frank, adding that office rents in the area are expected to rise by 0 to 3 percent for the whole of 2023 as global and mainland office occupants return.