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Investing

From minibuses to world’s most expensive tower: how Hong Kong tycoon Ma Ah Muk made and kept a fortune

Having made his fortune running the city’s biggest minibus company, the 87-year-old billionaire has turned his attention to commercial property

PUBLISHED : Tuesday, 15 May, 2018, 6:33am
UPDATED : Tuesday, 15 May, 2018, 12:31pm

Hong Kong’s “King of the Minibus”, billionaire Ma Ah Muk, has a simple strategy for success in business: he is constantly on the lookout for “exciting” investment opportunities that will deliver long-term returns.

It’s a tactic that has served the 87-year-old magnate well. “I have never lost any money in any investment,” says Ma, who runs the city’s dominant minibus fleet.

His latest – and most high-profile – investment was the purchase of 13 floors of The Center, the most valuable office tower on the planet and the tallest building in tycoon Li Ka-shing’s property portfolio. 

A group of investors that included Ma paid a record HK$40.2 billion (US$5.12 billion) for The Center, in what may have been the world’s most expensive real estate transaction. 

Ma holds a 27.37 per cent stake in the 73-storey tower. He claims he made the decision to get on board in a matter of minutes, based on the simple logic that there is plenty of room for rents to increase in such an iconic building in the city’s vibrant financial district. 

“It is Central. The very centre of the city. I agreed immediately once I was approached about it,” Ma said in an interview with the Post. “There are not that many [buildings] for sale in Central. I will not sell it later; I am not buying it for speculation, but for long-term rent.” 

Ma said the current rent in Hong Kong’s fifth tallest tower is around HK$90 per square foot, which is relatively low, and the current rent yield is about 3 per cent. His plan by the end of this year is to increase the rent to fetch a yield of just above 3 per cent, rising to 4 per cent in two years’ time. 

A peek at Hong Kong’s buyers of The Center

He showed the same lack of hesitation 50 years ago when he decided to venture into the minibus business, a move which earned most of the family’s early wealth. Ma Kiu Sang, his eldest son, said the family owns assets worth about HK$30 billion (US$3.8 billion).

The Chiu Chow-born businessman came to the city in 1948 aged 17 and, after a couple of years waiting tables, earned his first pot of gold running a tiny grocery store – described by his son as a “cubicle” – mainly selling rice in Tai Wan Shan in Hong Kong’s Hung Hom district. 

A small shop we paid a couple of hundred thousand for back then can yield a monthly rent of HK$300,000 now
Ma Ah Muk

As the gains from the grocery store started piling up, Ma began to buy licences for minibuses in the late 1960s after being told that a single licence worth a couple of thousand Hong Kong dollars could be rented out for as much as HK$100 a day. 

Koon Wing Motors, established by Ma in 1970, went on to become the biggest operator of minibuses in Hong Kong, with a fleet of about 650 vehicles today. His success earned Ma the lighthearted moniker, King of the Minibus.

But amid rising costs, a shortage of drivers and the rapid development of modern urban mass transit systems, Ma concedes that the sun is setting on the minibus sector. 

“There will be no growth in minibuses,” said Ma, shaking his head. 

Although the glory days of the minibus business have gone, Ma’s family has continued to build up its wealth. The main engine for this has been commercial real estate. 

His son, Ma Kiu Sang, told the Post that property now accounts for about 80 per cent of the family’s assets. 

“I’ve long noticed that buying shops and collecting rents is rather stable and can gain a lot in Hong Kong,” said Ma Ah Muk, who was a tenant himself in the early days. “A small shop we paid a couple of hundred thousand for back then can yield a monthly rent of HK$300,000 now.” 

The Ma family has been actively investing in shops. In 2015 they bought the Ka Fuk Shopping Centre in Fanling from the Link Reit for a reported HK$588 million; last year, they bought 60-62 Yee Wo Street in Causeway Bay for HK$600 million. 

Ma has a straightforward approach to commercial property investment, always buying shops in prime locations to minimise vacancies and holding them for the long run. 

“I do not sell the shops. I will not sell my 27 per cent stake in The Center to other people, I will pass them to my kids and then to my grandkids, generation after generation,” said Ma. 

He said he does not intend to increase his share in the tower as he seized the golden investment point and now it is too expensive. He pointed to newspaper reports saying The Center is now worth HK$60 billion, 50 per cent higher than when he bought it. 

Ma’s latest venture is a company called Niche-Tech, which develops materials for semiconductors in Hong Kong and mainland China. He has invested HK$120 million in the company as it prepares to list its shares on the Growth Enterprise Market in Hong Kong. 

“Technology is the new wave, encouraged by the central government,” said Ma. “I see a promising future for Niche-Tech. It has received subsidies from the mainland government. The listing is for gaining publicity. I could just inject HK$300 million, but the money cannot buy customers. Only with a stronger market presence can the company attract big companies to become its clients.”

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