Hang Lung picks up US government’s Hong Kong assets for HK$2.56 billion, a 20 per cent discount to market valuation

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Hang Lung said it had won a closed tender for six multistorey buildings at 37 Shouson Hill Road for HK$2.56 billion (US$330 million)

The sale price, which works out to HK$54,138 per square foot for one of Hong Kong’s most exclusive residential enclaves, was a 20 per cent discount from the low end of market valuation

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Exterior of 37 Shouson Hill Road on 30 May 2020. Photo: Edmond So

Pearl LiuandPeggy Sito

Published: 12:01pm, 10 Sep 2020Updated: 11:55am, 15 Sep 2020

Corrected [11:55am, 15 Sep, 2020]

[11:55am, 15 Sep, 2020]
Corrects in paragraph eight and throughout story to make clear the project comprises six buildings with a total of 26 flats between them, not six separate “mansions.”

Hang Lung Properties, led by a billionaire developer who frequently calls for dialogue between the United States and China, has stepped in to pick up the US government’s residential real estate asset in Hong Kong with a discount, just as US-China relations deteriorated to their worst in decades.

The Hong Kong developer, which mainly develops shopping centres and offices, confirmed that it had won a closed tender for six multi-storey buildings at 37 Shouson Hill Road for HK$2.56 billion (US$330 million).

“Hang Lung is pleased to have won the tender for Shouson Hill land,” the developer said in an email to South China Morning Post. “The price of this rare and premium land lot is reasonable, and the purchase is a vote of confidence in Hong Kong’s future.”

The sale price, which works out to HK$54,138 per square foot for one of Hong Kong’s most exclusive residential enclaves, was a 20 per cent discount from the low end of market valuation, from HK$3.2 billion to HK$3.5 billion. The project’s neighbour at 39 Shouson Hill Road was sold in July 2018 to China’s state-controlled conglomerate China Resources for HK$86,800 per square foot.

Ronnie Chan Chi-chung, chairman of Hang Lung Properties, at the company’s annual result press conference in Central on 21 January 2020. Photo: Jonathan Wong

“It wasn’t surprising that the bids made were so low when you consider the tensions between the US and China,” said Vincent Cheung, managing director at Vincorn Consulting and Appraisal. “But it’s very surprising that the US [government] is willing to sell at this price. Only when you have little confidence in a place are you willing to let it go at whatever price you can get.”