Wah Tak Fung Holdings has committed $400 million to acquire a residential site in Wan Chai and a residential building in Mid-Levels. David Chu Yu-lin, who has replaced Richard Chan Kin-hung as managing director, said the company had bought Nikken Heights, a 22-storey residential building at Prince's Terrace, Mid-Levels, for about $200 million in January. The company recently announced that Mr Chan had stepped down as managing director for health reasons. Mr Chu said the price paid for the eight-year-old building represented $5,000 per square foot, about 20 per cent to 40 per cent lower than comparable secondary market prices in the district. Director Kenneth Chan King-hung said the building was bought at a below-market price mainly because the original owner was desperate to liquidate the asset. The building has 42 units with a gross floor area of 40,000 sq ft. The company would spend at least $6.3 million renovating the units, he said. Nearly 90 per cent of Nikken Heights has been leased for short-term agreements, ranging from three to six months. 'We will refurbish each unit once the tenancy agreements expire,' Mr Chan said. The rental yield would increase to 8 per cent from the present 6 per cent after the renovation was completed. The company had also assembled a 5,000 sq ft residential site in Wan Chai with an investment cost of nearly $200 million. 'We hope to expand the site to 7,000 sq ft and negotiation is underway with various owners,' Mr Chan said. If site enlargement failed, the company would build on the existing 5,000 sq ft site, which could generate a gross floor area of 45,000 sq ft. The company has started renovation work on Monterey Court, its luxury residential project in Jardine's Lookout, at a cost of $20 million, he said.