Chungking Mansions may undergo facelift
PART of Chungking Mansions may be subdivided and sold by strata title following the Lippo Group's purchase of a substantial block of retail space there last week.
This will give investors a chance to buy into the IFJ Fashion Square, one of Tsim Sha Tsui's busiest shopping areas.
The Lippo Group-led consortium, through its publicaly listed property investment arm, Hongkong China Ltd, paid $680 million for 60,000 sq ft of retail space, including 3,000 square feet of advertising space fronting on to Nathan Road. The other consortium members were J. F. Asian Realty and Pearl Glorious Investment.
The shopping area comprises G/F Shop No 3, Shops Nos 1-15 on the first floor and the entire second floor of Chungking Mansions on Nathan Road.
Plans have been drawn up to split the shopping podium into 220 to 230 shops of about 300 sq ft, according to Mr Antonio Wu, assistant director of First Pacific Davies, who arranged the deal.
''This will be an extremely good opportunity for investors and end-users to buy their own shop in such a prime location, as most ground floor shops in the neighbourhood are for lease only,'' Mr Wu said.
''The retail market remains extremely active, with ground floor shop rents along the Golden Mile of Nathan Road reaching almost $600 per sq ft, so most retailers would prefer to buy their premises as a hedge against rising rents.'' He added there should be potential for capital appreciation.
Mr Wu said the new owners were considering re-selling the property by the end of April on a break-up basis.
Mr Jonathan Foxall, a director of Hongkong China and spokesman for the consortium, said Lippo Realty and Pearl Glorious would be joint project managers.
Chungking Mansions is in one of the busiest shopping areas in Tsim Sha Tsui, close to the junction of Nathan and Peking roads. Retail units in the building command some of the highest rents and sale prices in Hongkong.
Thousand of tourists and local residents pass by the building so it is strategically an important retail location.
Shop number five on the ground floor, with a 700 sq ft floor area, is believed to have a monthly rental of $420,000.
Other shopping arcades recently sold by strata title included New Capital Computer Plaza, in Shamshuipo, Lik Sang Plaza, in Tsuen Wan, and Honour Rich Hunghom Plaza.
Mr Wu said: ''This IFJ podium is one of the most attractive retail sites in Hongkong, so we would expect it to achieve an even better result.'' He said it would be the first large, prime shopping arcade to be broken up and sold by strata title in this part of Tsim Sha Tsui.
The property has consistently achieved an occupancy rate of 100 per cent and this new shopping arcade was therefore attractive to small investors looking for a good, long-term property investment.