Hong Kong Metropolitan University makes its second purchase in six months in this year’s biggest commercial deal
One HarbourGate East Tower , a premium office building formerly owned by cash-strapped Chinese tycoon Chen Hongtian, has found a new owner after Hong Kong Metropolitan University (HKMU) struck a deal with the receivers, according to people familiar with the matter.
The university agreed to pay HK$2.6 billion (US$334 million) for the 15-storey building in Hung Hom, Kowloon, the people said. It reflects a 42 per cent discount to the HK$4.5 billion Chen’s flagship entity Cheung Kei Group paid for the property in 2016.
The deal, the single-largest transaction in the city this year, suggests more investors are taking the plunge to scoop up distressed assets at deep discounts as the government takes steps to arrest a slump in the property market. Top mainland officials have also recently vowed to support Hong Kong as a financial hub, a tacit backing for a key pillar of the economy.
“HKMU has been actively exploring different ways to provide its students and staff with more and enhanced spaces for learning, teaching and research, including executive training programmes” to support its expansion, it said in a statement to the Post. It declined to elaborate on the transaction.
One HarbourGate East comprises an office tower and two levels of retail space totalling 279,000 sq ft, as well as 155 car-parking spaces. The asset was valued at HK$7 billion in 2022. It was put on the chopping block in July, after a failed attempt to sell in May 2023.
Chen lost control of the asset after what he described as “a short-term cash-flow disruption” to his business. Creditors also separately seized a 9,200 sq ft house on The Peak, which Chen bought for HK$2.1 billion in 2016.
The sale of One HarbourGate East topped recent high-value deals in Hong Kong’s commercial property market. Beijing-based sportswear company Li Ning acquired the Harbour East office tower in North Point for HK$2.2 billion in December last year, for its Hong Kong headquarters.
HKMU, the sixth-largest in the city in terms of undergraduates, has been an active buyer. The university paid HK$1 billion in July for Urbanwood Hung Hom, a 255-room hotel in Kowloon, to convert it into student accommodation, as Hong Kong aims to make the city a major education hub.
Hong Kong’s commercial property market is in the midst of its worst rout since the Asian financial crisis. Grade-A office values have dropped 40 per cent since their peak in 2018, while the number of employees at regional headquarters of multinational companies in the city has also declined by about one-third, according to a report published last month by S&P Global Ratings.
