Bank of China unit buys three commercial buildings in Hong Kong for HK$3 billion
Company sees potential and stable rental income in the city’s property market, particularly in shared working spaces that offer cheap rents for entrepreneurs
Bank of China (Hong Kong)’s asset management arm said it has completed the acquisition of three commercial buildings in Hong Kong for a total of HK$3.1 billion (US$396 million), the latest deal involving mainland entities in the city’s property market.
BOCHK Asset Management bought 100 per cent of The Wave in Kwun Tong and East Point Centre in Quarry Bay and the non-residential part of Thai Kong Building in Causeway Bay, through its first Hong Kong commercial property focused fund. The deals were closed in late July. It did not disclose the cost of each building.
“The price is quite expensive, but we still see a lot of potential in Hong Kong’s commercial buildings,” said Shen Hua, chief executive officer of BOCHK Asset Management, which has US$10 billion in assets under management.
Location and theme is the key for the fund to select purchase targets, he said.
Targeting a 10 per cent annual return for investors, Shen said Thai Kong Building, whose tenants include Nike’s biggest shop in Hong Kong, is a good location which can generate stable rental income.
The Wave is a co-working space building that has been was redeveloped from an industrial one, while the fund plans to turn East Point Centre into a pet-themed shopping destination incorporating a pet park, pet stores and pet hospitals.
“There are still some attractive property types lacking in Hong Kong, for example shared working spaces, which are definitely welcomed by young entrepreneurs who cannot afford expensive office rents,” said Christina Ngai, senior portfolio manager at BOCHK Asset Management.
The company bought the three buildings from veteran property investor Tang Shing-bor, who is known as the “king of retail property” in Hong Kong because of his huge holdings. It said Tang is also one of the investors in the property fund.