Evergrande crisis: creditors seek to drum up demand for Hong Kong trophy headquarters with rebuilding plan for a higher, harbour-view tower
- The cost of knocking down and rebuilding the tower in Wan Chai could add HK$3 billion to the cost for the land, agents estimate
- Once a crown jewel of Chinese tycoon Hui Ka-yan’s property empire, the Evergrande Centre was recently put on the market by receivers from Alvarez & Marsal
“If the new buyer chooses to rebuild the tower, the new building could stretch 135 metres high from the current 98 metres, or about 33-storeys with more sea-view floors,” said Godfrey Cheng, deputy senior director at Savills (Hong Kong), the sole agent mandated by the receivers of the property.
A total investment outlay of HK$10 billion to HK$12 billion would translate intto HK$28,950 to HK$34,740 per square foot. That is in line with the HK$31,000 per sq ft Henderson Land Development paid for the New Central Harbourfront commercial site 3 in a government tender last year.
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“A possible strategy would be for potential buyers to invest in the plot of land for the long term, rather than focusing on the 3-5 years of yield return of the office tower, which is definitely not very high at this moment due to the interest hikes,” said Cheng.