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Abu Dhabi, UAEMonday 24 September 2018

Record Dh18bn paid for Hong Kong tower

Deal is the latest to signal Hong Kong’s red-hot property market shows no signs of slowing down

Kowloon promenade in Hong Kong. CK Assets has paid a record for The Center tower. Anthony Wallace / AFP
Kowloon promenade in Hong Kong. CK Assets has paid a record for The Center tower. Anthony Wallace / AFP

Li Ka-Shing’s CK Asset Holdings sold its 75 per cent holding in The Center to a Chinese-led group for HK$40.2 billion (Dh18.92bn), a record for a Hong Kong office tower, the Hong Kong Economic Journal reported.

The deal will be announced in the near future, the Economic Journal reported, without saying where it got the information. Some domestic investors are also part of the consortium, the newspaper said. Representatives at CK Asset did not immediately return calls seeking comment.

The deal is the latest to signal Hong Kong’s red-hot property market shows no signs of slowing down. LVGEM (China) Real Estate Investmentlast week announced the HK$9bn purchase of a building from Wheelock & Co, a record per-square-foot price for a commercial building in Hong Kong’s Kwun Tong area.

Earlier this year, Henderson Land Development paid HK$23.3bn for the first commercial land to be sold by the government in the Central district in more than 20 years.

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For CK Asset, which recently changed its name from CK Property, the proceeds would give the company funds to diversify away from its main real-estate business. CK Asset and affiliate CK Infrastructure Holdings earlier this year agreed to buy a German maker of smart meters for about US$5.3bn, building on the company’s expansion in infrastructure and energy.

CK Asset’s properties, which include the Cheung Kong Center and Hutchison House, spanned about 17 million square feet as of June, with more than 80 per cent located in Hong Kong, according to the company.

The 73-storey building in the Central business district is the city’s fifth-tallest, according to the Skyscraper Center. Hong Kong’s towers command the highest rents in the world, according to a report last month from Knight Frank, which said rental costs are more than four times higher than in Singapore. Rental growth will continue to be robust on an influx of mainland Chinese tenants, Knight Frank said.

News involving the sale of The Center has been trickling out for at least a year, with the Economic Journal saying last year that ICBC Asia approached CK Asset about buying the stake in the tower for HK$34.8bn. At the time, ICBC denied the report, saying it did not engage in talks nor purchase the stake.

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