New World Development pays US$164.5 million for 20 per cent stake in three old buildings in prime Hong Kong area

New World Development now owns an 80 per cent stake in three rundown eight-storey buildings in Hong Kong’s prime Causeway Bay area

The price was about 29 per cent lower than the market expectation of HK$1.8 billion

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New World Development has acquired 80 per cent of units in three old buildings in Causeway Bay, including the one pictured above. Photo: Handout

Published: 7:30am, 3 Nov 2021

New World Development has acquired a further 20 per cent ownership in three dilapidated buildings in the heart of Causeway Bay for HK$1.28 billion (US$164.5 million), according to people familiar with the matter.

The price was about 29 per cent lower than the market expectation of HK$1.8 billion, analysts said.

The latest acquisition takes New World’s ownership to 80 per cent in the three eight-storey buildings close to Russell Street, once the world’s most expensive retail location.

Under the Land (Compulsory Sale for Redevelopment) Ordinance, developers can force a compulsory auction to buy the remaining stake in a building, if it is over 50 years old and they already own at least 80 per cent.

Russell Street in Causeway Bay is a shopping hub for locals and tourists. Photo: Felix Wong

The four ground-level shops and 16 flats in the buildings at the intersection of Percival Street, Russell Street and Lee Garden Road sold for HK$1.28 billion, Land Search Online records show.

The company must have paid between HK$140,000 to HK$150,000 per square foot for the shops and HK$15,000 per square foot for the flats, said Martin Wong, head of research and consultancy in Greater China at Knight Frank.