Hong Kong property

Creditor of vanished tycoon Ye Jianming says three floors in Hong Kong’s Convention Plaza worth minimum HK$1.79 billion

  • Hammer Capital believes three floors at Convention Plaza, controlled by missing tycoon Ye Jianming, should be valued at no less than HK$1.79 billion
  • A new tender for the three office floors will close at noon on January 30
PUBLISHED : Friday, 28 December, 2018, 8:02am
UPDATED : Friday, 28 December, 2018, 8:29am

One of the creditors of missing mainland tycoon Ye Jianming has claimed that the three floors of ­office space at the Convention Plaza in Wan Chai that have been offered for auction should fetch a minimum of HK$1.79 billion, ­according to a court document.

Ye’s company, CEFC China Energy, paid a record HK$1.38 ­billion for the 21st, 22nd and 23rd floors of the building, which total 49,554 sq ft, in 2016.

The creditor, Hammer Capital Private Investments, believed the property should be valued at no less than HK$1.79 billion, or HK$36,000 per square foot, to make sure its lending to CEFC, which totalled about HK$495 ­million, could be covered.

The other creditor, Industrial and Commercial Bank of China (Asia), has not offered any indication on what it thought the property was worth.

Vanished tycoon’s office floors in Hong Kong put on sale again

“It would be challenging for creditors to sell at a premium of the property’s valuation now,” said Tsang Kit-chun, managing director of AA Property, a specialist in distressed assets.

He said only three out of 20 foreclosed properties were sold during an auction held by the firm last week.

“Most distressed properties had been sold at a 10 to 15 per cent discount to the valuation,” he said.

“Everything is getting hard to sell at this moment, no matter whether they are distressed assets or not.”

An auction for the floor space on November 26 flopped when bids failed to match the reserve price.

Hammer Capital had applied for an interim injunction to try to block that sale, according to court documents, but it was not granted.

The new tender for the three floors will close at noon on January 30, according to JLL, which was appointed as sole agent for the public tender by the receivers of the property. JLL did not disclose an indicative price for the property.

Hammer Capital, a British ­Virgin Islands-registered company, was not available for ­comment yesterday.

Documents showed that in September another interested party had been prepared to pay HK$1.55 billion for the three floors.

Meanwhile, in October, a ­buyer paid HK$302 million, or HK$37,117 per square foot, for an 8,131 sq ft office unit on the 34th floor of Convention Plaza, or about 3 per cent more than ­Hammer Capital’s reserve price, according to data held by Centaline Property Agency.

“Two months have resulted in a big change in Hong Kong as the market cools down,” said Tsang.

Eric Ong, a director at Midland IC&C, which focuses on com­mercial properties, said the US-China trade war had dampened investment demand for commercial properties.

Hong Kong’s prime office prices to fall 5 per cent next year: Savills

“Mainland companies have been slowing their acquisitions amid the ongoing credit tight­ening at home. In the absence of major transactions, the investment market is very quiet now,” he said.

Ye, who in the space of five years rose from obscurity to become the head of the mainland’s fourth-largest oil conglomerate, vanished in March. No information about him has been released and he has not been formally charged with any wrongdoing.