Sing Tao buoyed by $370m sale
Media firm's shares soar as it cashes in on bullish property market to secure the price for its Kowloon Bay headquarters
Sing Tao News Corporation's sale of its Kowloon Bay headquarters for $370 million saw the company's share price shoot up 70 per cent at one stage yesterday.
Soon after trading opened, the share price leapt from 38 cents to 65 cents before ending the day at 43 cents, 13 per cent higher on the day. The building sale brought the firm an accounting profit of about $190.89 million as it cashed in on the bullish commercial property market.
'The value of industrial properties in the vicinity of Kowloon Bay in general has risen to a record level. The sale will enable the group to unlock the potential redevelopment value of the building site,' said Sing Tao in a written announcement.
Occupying a 44,714 sq ft site at No1 Wang Kwong Road, Kowloon Bay, the eight-storey industrial building comprised a gross area of 277,000 sq ft, said Kent Fong Chi-kit, director of DTZ Debenham Tie Leung's investment department, which brokered the deal.
'The transaction price translates into an accommodation value of about $1,000 per square foot,' he said, adding that the redevelopment cost for an office project would be capped at about $1,000 per square foot.
The buyer, Billion Development and Project management, a developer involved in small-scale commercial projects in Kwun Tong and Lai Chi Kok, plans to bulldoze the building to make way for a high-end office block that is also likely to include space for light industry, according to Lau Yu-chung, a project planning manager of the company.
'Our firm has been developing residential and commercial properties but since the price of residential sites has risen to an unreasonable level recently we have put more resources into commercial projects,' Mr Lau said.
'Kowloon Bay is a less convenient area compared with Kwun Tong and Cheung Sha Wan, so tenants eyeing this district mostly have particular needs for plenty of space to facilitate their operations. Our new building is likely to be built with features relevant for light industry.'
He added that redevelopment work would start after the departure of Sing Tao, which had leased back the property for an initial nine months.
A Sing Tao spokeswoman said the firm had not decided on its relocation plans.
'We will move our operation as a whole, but we haven't fixed the location yet,' she said, adding that Sing Tao would move out of the building within 18 months as it had the right to extend the tenancy for an additional three, six or nine months.
Prices of commercial properties in Kowloon Bay were buoyed by Sino Land's $1.82 billion winning bid for a commercial site in the district in a government land auction in February.
Office prices in Enterprise Square Three, the newest and most expensive office building in the district, have doubled since the beginning of last year.
Property agents said a fashion firm had sold a 159,000 square foot office on the building's 15th floor for $68.37 million, or about $4,300 per square foot, in April - more than double the $32.8 million it paid at the beginning of last year.
1938: Sing Tao Newspaper Group is founded by Aw Boon Haw to publish Sing Tao Daily
1949: Company launches Hongkong Standard English-language daily
1987: Entire operation moves from Lai Chi Kok to headquarters in Kowloon Bay
1998: Chairman Sally Aw Sian is named as a co-conspirator to defraud advertisers by falsely inflating circulation figures at the Hongkong Standard
1999 (January): Tobacco tycoon Charles Ho Tsu-kwok files bankruptcy petition against Sally Aw to recoup a $274 million debt owed to Mr Ho?s grandfather, the late former chairman of Hong Kong Tobacco, Ho Ying-chie
1999 (April): The Aw family?s 61-year reign over Sing Tao Holdings comes to an end as Ms Aw sells her 50.04 per cent stake for $262 million to avoid bankruptcy, to a fund controlled by investment bank Lazard
2001: Charles Ho buys the controlling stake of Sing Tao from Lazard for $355.6 million through his publicly listed investment vehicle Global China Technology Group