Hon Kwok Land Investment Co says it may spend $180 million to redevelop its recently acquired commercial-residential building in Central into an upmarket commercial property. This would raise the group's investment in the property, Korea Centre Building, to $667.5 million including the $487.5 million paid for the building. The company acquired the 20-storey Korea Centre Building, at 119-121 Connaught Road Central, from Korea Foreign Trade Association. Managing director Herman Fung Man-hei said the proposed redevelopment would not start until the building's leasing agreement expired in August 2000. He expected to generate a gross floor area of 100,500 square feet based on a plot ratio of 15 times, Mr Fung said. The building was 88 per cent leased while the rest was either used by the Korea Foreign Trade Association or was vacant. Mr Fung said the building was generating about $24 million in rental income a year, excluding units occupied by the association which - at present - was not paying rent. The annual rental income would rise to $26 million when the association started paying rent after the purchase was completed. 'It is a rare opportunity to have a building in Central available for sale at a reasonable price,' he said. The deal represents an average sales price of $5,673 per square foot. He said the company had decided to buy the building after the owner cut its asking price by 40 per cent, a move precipitated by the financial turmoil hitting the region. The company would finance the acquisition through internal resources and bank loans, he said. Hon Kwok would release two residential and commercial projects for pre-sale after the Lunar New Year, he said. They are Kensington Plaza in Jordan and Chelsea Court phase two in Cheung Sha Wan.
