Andrew Moore’s Pamfleet eyes mainland China’s old buildings
Shanghai next potential market for real estate investment company
Andrew Moore is chief executive and a founding partner of the Pamfleet Group, a privately held company focused on value-added real estate investment in Hong Kong and Singapore.
Moore was a founding principal of Pamfleet in 2000. Between 1995 and 2000 he worked for a pan-Asian real estate fund managed by Jardine Fleming. After six years in the London property market, Moore moved to Hong Kong to work for Jones Lang Wootton in 1993.
Q: What is the future plan of Pamfleet?
A: We are looking at the markets in China like Guangzhou because of its connection with Hong Kong.
We like Shanghai and I would hope that Pamfleet would have done one to two deals most probably in the first quarter of the year.
Q: What is the business strategy in China?
A: The nature of our business is valued-added manager. The game we play in Hong Kong will be the game we play in Shanghai. [Investing into] Shanghai is not a decision we take immediately. It is a natural evolution of Shanghai over the last 20 years to be a developed mature market. So you now see the city has 30-year-old buildings. They are not obsolete but like what we previously did in Hong Kong. This is the next potential market we are doing.
Q: What is your plan in Hong Kong?
A: When the revitalisation scheme ends in March this year, it will be very interesting to see what happens in that segment of the market.
(Editor’s note: The Hong Kong government announced in October 2009 a set of revitalisation measures to facilitate the redevelopment and wholesale conversion of older industrial buildings. These revitalisation measures came into effect on April 1, 2010. They aim at providing more floor space for suitable uses to meet Hong Kong’s changing social and economic needs. It will end on March 31)
We eye industrial buildings that have been rezoned. There are many industrial buildings in urban areas of Hong Kong. They were already rezoned [to other usage]. Eventually the owners will sell to other investors.
We will be watching what will happen in the industrial market. We look for opportunities to buy.
Q: For retail investors, which part of industrial buildings in Hong Kong still have growth potential?
A: Wong Chuk Hang. It may be too late for investors to make profit [in the short term]. But for long-time buyers , Wong Chuk Hang is still okay.
Q: Can you name some successful deals?
A: Vicwood Plaza (now renamed Infinitus Plaza)in Sheung Wan was extremely successful.
(Editor’s note: Pamfleet and Morgan Stanley bought Vicwood for HK$842.8 million in 2003 and sold it for HK$2.6 billion in 2006)
But if we did not do the renovation, and the repositioning, we may still get the same return we did.
We are also very pleased to get the return from Nexus Building.
(Editor’s note: Pamfleet teamed up with Morgan Stanley Real Estate Fund and another partner in 2006 to purchase the then Hang Seng Building on Hong Kong’s Des Voeux Road for HK$2.25 billion. In 2009, after renovating and repositioning the asset, the consortium of owners sold Nexus for HK$3.6 billion)
Rental was HK$23 per square foot per month in 2006 when we bought it. But Exchange Square Three asked for HK$60 to HK$65 per sq ft. The plan was to renovate the building and the targeted rent after renovation we expected was HK$42 per sq ft. In fact we managed much more than that. The first one or two tenants were willing to pay HK$80 per sq ft .
It was the most uncertain period. The global financial crisis was a huge event and we did not know how long it would last and how it would go.