Capital Strategic Investment shifts focus to Shanghai property market
Real estate owner Capital Strategic Investment plans to sell an estimated more than HK$1 billion worth of property in Hong Kong next month to pursue opportunities in Shanghai.
Chairman Mico Chung Cho-yee made the disclosure after the company's special general meeting, saying Capital Strategic hopes to make this money by releasing for sale next month two 5,500 square foot luxury houses on Tai Tam Road and from next month's closing tender for 104,158 square feet of office space, as well as 17 parking spaces in a Wan Chai building.
Mr Chung said a portion of the revenue from the property sale would be used for further expansion in what he forecast would be a faster-growing Shanghai, while the remaining revenue would finance existing projects in Hong Kong.
The company was cashing in after the more than doubling in value of its commercial and luxury residential properties in recent years, he said.
'We are not a company with unlimited resources,' he said.
He said the firm was in talks to acquire a commercial property in Shanghai for US$100 million, as part of its two billion yuan mainland investment plan. He hopes to conclude the deal within two months.
He said the firm would also invest an additional 180 million yuan to redevelop the building in Hongkou district into a trendy retail and office project, rasing the total investment to 630 million yuan.
In February, the company teamed up with Lehman Brothers to buy the distressed Fuhai Commercial Centre in Shanghai, for about 450 million yuan.
The company also plans eventually to enter other mainland cities including Hangzhou and Wuxi.
Mr Chung estimated that the commercial spaces at 88 Gloucester Road would fetch about HK$830 million. He also said that while the prices for the luxury houses at 12-16 Tai Tam Road have not yet been finalised, he believed they would not exceed HK$150 million each.
Capital Strategic, which owns and manages 1.6 million square feet, mainly converts second-tier Hong Kong commercial buildings into shopping malls.
The shares closed down 4.76 per cent at HK$2 yesterday.