HK Ferry in $1.5b Tai Kok Tsui deal

Hong Kong Ferry has entered into a $1.5 billion property development agreement with Henderson Land for the redevelopment of its Tai Kok Tsui waterfront site into a residential and commercial complex.

Under the agreement, Hong Kong Ferry's property-development arm, Lenfield, will receive $1.5 billion from two of Henderson Land's wholly owned subsidiaries. Hong Kong Ferry is 30 per cent-controlled by Henderson Investment, a subsidiary of Henderson Land.

Henderson Land has also agreed to a stand-by loan to Lenfield for up to 50 per cent of the cost of the development, subject to a ceiling of $1.1 billion.

In return, Henderson Land will be entitled to 50 per cent of the sales proceeds from the 'domestic portion' of the development.

Nancy Leung, for Hong Kong Ferry said: 'The proceeds will come from the sale of the newly built residential and commercial units, including carparks. The proceeds will be split 50 per cent.' The agreement also stipulates that Heng Tat, a wholly owned subsidiary of Henderson Land, will be engaged as the main contractor of the project.

Hong Kong Ferry will pay Heng Tat for the prime costs of all of the works including subcontracted works. The construction costs for the superstructure of the development were estimated to be about $2 billion.