Shun Tak takes over commercial project in Beijing

PUBLISHED : Friday, 19 April, 2013, 12:00am
UPDATED : Friday, 19 April, 2013, 4:05am

Shun Tak has increased its investment on the mainland by acquiring a commercial project in Beijing for 1.29 billion yuan (HK$1.62 billion).

The developer yesterday said it had bought an office and hospitality development project, Modern Green Tower, from Modern Green Development.

On Tuesday, the company announced it would invest in the second phase of a residential and commercial project in Beijing.

Modern Green Tower is under construction and is scheduled for completion in July 2014. It covers an area of 5,832 square metres and could yield a gross floor area of up to 38,700 sq metres. The 21-storey tower has four basement levels, giving an extra floor area of 16,800 sq metres.

Half of the floor area will be used as office space, while the rest will be developed into a hotel or serviced apartments.

Pansy Ho, the managing director of Shun Tak, said: "The company is of the view that real estate performance will continue to be driven by strong internal demand.

"This project is expected to strengthen recurring income stream upon rental stabilisation. It presents a promising opportunity for the group to build up its asset base and enjoy value enhancement."

Alvin Yip, the managing director of property consultant DTZ's mainland investment department, said the average office rent of the project could reach about 350 yuan per square metre.

Yip said the mainland investment market remained active in the first quarter as local and overseas institutions were optimistic about the prospects and were looking for opportunities.

"They usually look for projects which offer a rental yield of more than 8 per cent," he said.