Record reserve price for Swire hub target

Swire Properties has applied successfully for a compulsory sale of an industrial building in Quarry Bay with a reserve price of HK$5 billion - the highest ever of its kind - in a bid to expand its hub in the eastern part of Hong Kong Island.

Zung Fu Industrial Building, at 1067 King's Road, is set to be sold through an auction.

The record-breaking price tag beats that of New World Development's State Theatre Building in North Point, whose reserve price was HK$4.7 billion in 2020.

The result came nearly four years after Swire applied for the compulsory sale of Zung Fu and a nearby industrial block, Wah Ha Factory Building at 8 Shipyard Lane, in February 2018. The company owns 86.957 percent of the project's stakes.

A representative of Swire said the developer welcomed the compulsory auction by the Lands Tribunal and it plans to rebuild the two projects into an office building and for other commercial uses. The total gross floor area would be around 779,000 square feet.

In other news, Henderson Land Development said it formed a joint venture with Empire Development Hong Kong and Hysan Development for the HK$8.2 billion Bailey Street and Wing Kwong Street development project in To Kwa Wan.

Hysan will acquire a 25 percent stake with a maximum capital commitment of HK$3.05 billion, according to an exchange filing.

In September 2021, Henderson Land secured the tender for the To Kwa Wan project by the Urban Renewal Authority for HK$8.19 billion.

The project, covering a site area of approximately 7,406 square meters, will provide a maximum total gross floor area of 66,654 sq m upon completion. It will be redeveloped into a development with residential units, commercial properties and public vehicle parks.

Martin Lee Ka-shing, chairman of Henderson Land Group, said the project, located in the heart of Kowloon East, offers high development potential.

"Together with the group's several other redevelopment projects in the area, it is expected to create synergy and enhance the overall liveability of the district, while contributing to sustainable development," Lee said.

Hysan said it is a quality site with high development potential, adjacent to the burgeoning Kai Tak hub and is just a five-minute walk from To Kwa Wan and Sung Wong Toi MTR stations.

victor.zhong@singtaonewscorp.com