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Kenneth Ko

AMOY Properties, the property investment arm of Hang Lung Development, has agreed to buy 14 floors of Shui On Centre in Wan Chai for $1.52 billion.

  After the group's annual meeting yesterday, managing director Nelson Yuen Wai-leung said Amoy had agreed the acquisition with Shui On Group on Thursday.

  He said Amoy would buy the space between the 15th and 28th floors, totalling about 180,000 square feet - about one-third of the building space.

  The purchase also includes 45 parking spaces in the building.

  The price of $1.52 billion represents an average cost of $8,444 a sq ft, which is a record for office space in Wan Chai.

  The capital value of office space in Convention Plaza on the Wan Chai waterfront is about $7,000 a sq ft.

  Mr Yuen said Amoy had paid 20 per cent of the price as a deposit. The rest would be paid within three months.

  He said the property had a rental yield of 4.5 per cent, which would rise to 6.5 per cent after tenancies were renewed by 1995.

  He said Amoy had sufficient resources to pay for the purchase and there was no need for a cash call.

   A US$250 million convertible cumulative preference share issue was launched by Amoy last month. Its parent Hang Lung successfully arranged a three-year loan of $1.74 billion.

  Hang Lung chairman Ronnie Chan Chi-chung warned that the territory's housing market would be further dampened if the 70 per cent mortgage lending policy was put into law.

  He said the problem of high home prices stemmed from the limited supply of land, and he urged the Government to release more land to resolve the problem.



Amoy pays $1.52b for office space