Wheelock Properties

Lane Crawford House goes up for tender

PUBLISHED : Wednesday, 27 July, 2005, 12:00am
UPDATED : Wednesday, 27 July, 2005, 12:00am

With supply tight, Wheelock's former flagship in Central could fetch $2b

Wheelock & Co's Lane Crawford House on Queen's Road Central is on the market, and with the office and retail property rebound and tight supply of new commercial properties in Central, property consultants said it would draw keen competition from Hong Kong developers and overseas firms.

Wheelock is inviting local and foreign firms to bid. Private tenders will close on September 12.

Henry Lam Wai-hon, executive director of sole property agent CB Richard Ellis, estimates the 24-storey office-retail tower will fetch more than $2 billion, making it the most expensive en-bloc property in Central for almost 10 years.

Built in 1977, the former Lane Crawford flagship store has a site area of 12,286 square feet and a gross floor area of 195,500 sqft.

Agents said the most attractive element was the retail space, with a gross floor area of 89,500 sqft from the basement to the 6th floor. Office space starts on the 7th floor.

Property agents said prices for office space and shops in Central had jumped 30 to 40 per cent since October, and retail rents on Queen's Road Central have almost doubled since the Sars outbreak.

BNP Peregrine Paribas property analyst Adrian Ngan Wai-hung said prices of strata-title office spaces in the area were about $5,000 to $6,000 per square foot.

However, some property consultants said it was difficult to compare Lane Crawford House with strata-title office spaces.

'The transaction price could give the market a surprise, taking into account the limited new supply in the district,' said Desmond Poon Chi-ming, associate director at Chartersince Surveyors, adding that he was surprised the property was not being held as a long-term investment, given the tight supply.

Gareth Williams, property investment director of Wheelock Properties Hong Kong, a Wheelock unit, said: 'As Lane Crawford have moved their flagship Central store to a more high-visibility location in IFC Mall earlier this year, the present site, which had been their home for the last 28 years, is surplus to requirements.'

Lane Crawford is privately owned by family trusts of Wheelock chairman Peter Woo Kwong-ching.

Rob Blain, chairman and chief executive of CB Richard Ellis Asia Pacific, said no similar properties had become available along Queen's Road Central in the past 10 years.

The last major commercial property transaction in Central was the sale of Entertainment Building at 30 Queen's Road in the heyday of the last property boom in November 1996, for $3.64 billion, or $17,239 per square foot.

In October 2004, China Resources sold a commercial site at 92-94 Queen's Road Central, on the western fringe of Central, to developer Yu Tai Hing for $1.33 billion. The site will be occupied by a 28-storey office-retail tower with a gross floor area of 186,092 sqft when complete next year.

The government is preparing to auction the 0.42 hectare prime Central Market site under this year's land sale application list, with some estimates tipping a price tag of more than $5 billion.