Hong Kong’s ‘electronics king’ Koo to spend US$1.16b on two duel-purpose property developments in Qianhai
“Inno” Park and City will be created from former factory sites into office and residential complexes over the next four years
Hong Kong’s “electronics king” Koo Ming-kown has kicked off two projects worth HK$9 billion (US$1.16 billion) to turn a couple of former factory sites in Qianhai — the commercial area in Shenzhen also known as Qianhai New District – into duel office and residential complexes over the next four years.
The 73-year-old entrepreneur invited scores of guests, including top local Cantonese popstars Alan Tam and Joey Yung, to a ceremony in Qianhai to mark the launch of his “Inno” park and city.
Koo said the thinking behind the projects is very much in line with the national policy of transforming Shenzhen from a manufacturing centre into a technology hub.
His New York-listed company Nam Tai Property was formerly known as Nam Tai Electronics.
“After the factory sites have been be turned into commercial and residential projects, they are expected to deliver an extra HK$1.5 billion to HK$2 billion (US$192.68 -256.90 million) in profit every year to investors — around ten times more profitable than if the sites were left strictly manufacturing,” Koo told South China Morning Post at the launch.
“The conversions will need investment, but it will prove to be a good investment over the long term.”
Koo, who earned his first fortune selling calculators in the early 1970s before moving onto high-end electronic products in the 1980s, was among the first batch of Hong Kong manufacturers to head north to set up factories in the mainland, when China turned Shenzhen into the world’s factory.
At its peak, his company had a 10,000 workforce, and it was still reported to have a turnover of US$1 billion in 2014, when it closed those factories.
“Until the closures, we still had a lot of customers and loyal staff. The business is still making a good profit, after 35 years in operation.
“But it has become a tougher job being a manufacturer and was starting to take up a lot more time for me to manage and to meet with contacts,” he said.
“At my age, I decided it would be easier to become a landlord, as I could hire professionals to design and construct the buildings, and manage their leasing.
“This is also in line with the government’s policy of wanting to turn Shenzhen from a manufacturing centre into a high-technology hub. The new offices in the projects will be targeted at attracting those types of tenant,” he said.
Over the past three years, Koo has carefully managed the cutting of 7,000 jobs from his payroll claimed he has offered compensation package above government standards, and sold off his machinery to rival manufacturers.
The company owned two large tracts of land that housed those factories: one covering 130,000 square metres will become home to “Inno Park” in Guangming New District. It’s being designed by Hong Kong architectural firm Ronald Lu & Partners who will turn it into a 360,000 sq m of office and residential floor space, with a completion date of two years.
The other 52,600 sq m site is four kilometres from Qianhai, and will become “Inno City”. Construction will start there next year and its floor area of 360,000 sq m is expected to be complete by 2020.
Both will be roughly split 70 per cent offices for technology companies and the rest residential units.
“The two pieces of lands were bought many years ago at a low cost, and as a result we will be able to offer the offices at lower rents to attract start-ups and technology companies,” he said.
Their total HK$9 billion development costs will be met using internal resources, bank finance, and bonds.
“We may also consider invite some partners to finance the construction,” Koo said.