Swire Properties yesterday acquired Tai Sang Commercial Building in Wan Chai at auction for HK$1.36 billion or HK$7,334 per sq ft, extending its Pacific Place footprint.
'It's a fair price,' said Swire Properties chief operating officer Gordon Ongley. He said the limited supply of office space on Hong Kong Island underpinned the company's optimism about the sector.
Swire Properties won the building after 26 bids, beating seven other investors or developers, including Chinese Estates, Nan Fung Development, Emperor Investment and Easyknit. The opening bid was HK$850 million.
The 30-year-old office block, originally owned by descendants of the Ma family that established Tai Sang Bank and Tai Sang Property, was put on sale by public auction because of a family dispute. Two other sites held by the Ma family were also put on sale yesterday.
Tai Sang Commercial Building is located at 24-34 Hennessy Road. It has a total gross floor area of 185,447 sq ft, including 16,773 sq ft for retail use.
'The price is cheap compared with current asking prices of around HK$8,000 per sq ft,' said Gigo Lam Chak-fai, associate director of Ricacorp (CIR) Properties. Average rent in the area is about HK$20 per sq ft per month, while grade A premises at Three Pacific Place rented for HK$50 per sq ft, he said.
Mr Ongley said Swire planned to spend HK$150 million to fully refurbish the 28-storey office building as part of its Pacific Place portfolio which is fully leased.
Meanwhile, William Ma Ching-wai, chairman of Tai Sang Bank, acquired the site at No7 Bonham Strand West and No171 Wing Lok Street in Sheung Wan for HK$25.2 million, 119 per cent above the opening bid. The 1,392 sq ft site at No50 Bonham Strand West was sold for HK$60 million.