Swire in talks to sell Cityplaza One office tower as it picks up the pace on asset sales after first interim loss in half a century

Cityplaza One, completed in 1997, has about 629,000 square feet (58,400 square metres) in gross floor area

The 21-storey office tower is said to have received a purchase offer of HK$10 billion (US$1.3 billion), according to industry sources

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Cityplaza One, a 21-storey office building owned by Swire Properties at the Taikoo Shing project in Quarry Bay, Hong Kong. Photo: May Tse

Published: 1:47pm, 28 Oct 2020Updated: 10:49pm, 28 Oct 2020

Swire Properties Limited, one of Hong Kong’s largest owners of offices and shopping centres, said it is in discussions to sell a 21-storey office building on the eastern side of Hong Kong Island, as it picks up the pace on an asset-disposal programme after its parent posted the first interim loss in half a century.

The company said it’s in talks to sell Cityplaza One at the Taikoo Shing project in Quarry Bay, although “no agreement for the disposal has been reached,” according to its statement to the Hong Kong stock exchange. Trading in the shares of Swire Properties and its parent Swire Pacific Limited were halted for the announcement.

Swire Properties’ interim core profit plunged 80 per cent to HK$3.75 billion (US$484 million), as rental income from offices, retail stores and restaurants at shopping centres, as well as hotel occupancy at its Pacific Place mixed-use complex in Admiralty plunged amid dwindling business and leisure visitor numbers. The developer offered 227 car parking space and 62 motorcycle lots for sale two weeks ago, the first time it put the “noncore assets” at its 43-year old Taikoo Shing housing project on the market, aiming to generate at least HK$690 million from the entire disposal at HK$3 million for each car space.

Swire Pacific, one of Hong Kong’s largest and oldest conglomerates and the 82 per cent owner of Swire Properties, swung to its first interim loss since 1974, as its Cathay Pacific Airways unit was weighed down by the unprecedented travel slump from the coronavirus pandemic.

An aerial view of Swire Properties’ Taikoo Shing project in Hong Kong as of 30 May 2012. Photo: SCMP

The conglomerate, which owns Cathay Pacific, earned HK$15.85 billion in first-half profit last year. Cathay Pacific, Hong Kong’s flagship carrier, received a HK$39 billion financial bailout from the government in June to survive the slump in the global aviation industry. Still, it had to axe 8,000 jobs worldwide – two-thirds of them in Hong Kong – and shut down its Cathay Dragon regional carrier, to downsize amid a shrinking aviation market.