HK$4.5 billion for a Kowloon office tower? The buyer of Hong Kong’s most expensive home strikes again

Cheung Kei Group, the mainland Chinese conglomerate which last month spent HK$2.1 billion on a house on the Peak, said on Monday it agreed to buy an office tower in Hong Kong’s Kowloon district for HK$4.5 billion.

Cheung Kei is owned by Shenzhen tycoon Chen Hongtian whose purchase of a house at 15 Gough Hill Road in June set a record price for Hong Kong residential property. The purchase attracted further attention because no stamp duty was paid on the transaction, and because it was agreed that it would be paid partly in cash and partly by the transfer of a commercial property in a non-core area of Shenzhen.

Prior to his purchase of the house on the Peak, Chen was little known in Hong Kong.

The Kowloon office development Cheung Kai will buy is the East Tower of One HarbourGate at 18 Hung Luen Road. The deal includes a 15-storey office tower and two-storey retail villa, East Villa, which span areas of 254,000 sq ft and 26,000 sq ft respectively. As part of the transaction, Cheung Kei will also acquire naming rights to the building.

According to research from Jones Lang LaSalle, the number of mainland Chinese companies seeking office space in Hong Kong has nearly doubled in the past five years.

Another tower in the One HarbourGate development, the 15-storey west office tower, was purchased by China Life Insurance (Overseas) for HK$5.85 billion in November last year. Savills was the agent for both of the Kowloon office transactions.

When the East Tower is completed it will serve as Cheung Kai headquarters.

In the case of the Peak residential purchase, tycoon Chen was able to avoid HK$170 million in stamp duty on the home by buying the company that owned the property, and so paid a share transfer fee instead.