Partners Group, the international private equity fund management firm, has teamed up with a Hong Kong-based investment fund to buy an industrial building in Kwun Tong for HK$958 million.
The buyers plan to convert the 13-floor warehouse building - Kian Dai Industrial Building - on Hung To Road into a grade A office tower in line with the city's plan to transform Kowloon East into a new business district.
Bastian Wolff, a senior investment manager at Partners, said : "We are excited to invest in this property for our clients. Together with Pamfleet, our local operator, we aim to reposition the property into a branded commercial building with sustainable features to capitalise on the trend for businesses to locate their middle and back offices to this more affordable area in Hong Kong."
The buyers must pay stamp duty of about HK$81 million.
Wolff said the firm was aware of government policies imposed in the past three years.
"We understand that the government's intention is to reduce liquidity in the strata title market," said Wolff, referring to the doubling of stamp duty in February on residential and non-residential properties valued at more than HK$200 million.
But he said the government was also very supportive of the development of Kowloon East.
After conversion, the office building would be suitable for large tenants from a range of industries - including financial services and manufacturing - looking for premium office space at more affordable rents than those offered in Hong Kong Island's Central district, Wolff said.
He said Partners, which is listed on the SIX Swiss Exchange in Zurich, was a global firm with over €28 billion (HK$282 billion) in investments under management in private equity, private real estate, private infrastructure and private debt.
International property consultancy Knight Frank said measures imposed over the last three years in Asia, including Hong Kong, were a result of significant price rises that had brought into focus issues of affordability and the risk of asset bubbles.
"The measures are temporary, and we have seen that as quickly as the cooling measures can be implemented, they can also be removed," Knight Frank said. It said property prices in Hong Kong would drop by 10 per cent over the next 12 months.