The acquisition marks the revival of institutional interest in HK property
A joint-venture investment fund managed by Morgan Stanley has bought Vicwood Plaza in Sheung Wan for $842.8 million in the biggest property transaction this year.
Jones Lang LaSalle investment department head Tony Lo, who advised on the sale, said investment sentiment was improving with the end of the Iraq war and the easing of Sars fears. The exceptionally low cost of funding also continued to fuel investment interest.
'The Vicwood Plaza deal marks the beginning of a revival of institutional investment interest in Hong Kong property,' Mr Lo said.
Vicwood Plaza, which was bought by privately run Vicwood Group for about $600 million in 1987, is a 38-storey office building with a floor area of about 400,000 square feet.
The price paid by Morgan Stanley generates an initial yield of 6.8 per cent on existing leases, which could improve to 8.9 per cent on a fully let basis.
Morgan Stanley's partner in the acquisition is Pamfleet (HK), which was formed in 2000 as a management buy-out of Jardine Fleming's JF Property Management and JF Property Services.
