133 Wai Yip , which was acquired in 2013 for HK$930 million (US$119 million), could fetch as much as HK$1.45 billion, according to Vincorn.
A mixed-use commercial building in Kowloon’s Kwun Tong district is on the market, with the owners likely to get a 50 per cent return on investment made a decade ago, according to one estimate.
Hong Kong-based private equity firm Gaw Capital and its partners could get as much as HK$1.45 billion (US$186 million) for the former 13-storey industrial building with an area of 193,000 sq ft, according to Vincorn Consulting and Appraisal.
133 Wai Yip , which was acquired by Gaw Capital in 2013 for HK$930 million, is scheduled to be sold at an auction on September 4, according to the agency, the designated auctioneer. The auction will be held at their office in Quarry Bay.
“Kwun Tong, as an emerging commercial hub in Hong Kong, has become an attractive destination for local and international companies seeking convenient, well-connected, and affordable office spaces with considerable appreciation potential,” said an agent.
“Given its advantageous location, the property is well-positioned to attract quality tenants, making it a compelling investment opportunity for those seeking stable rental income through long-term investment.”
The 55-year-old building has a 76 per cent occupancy rate and is being rented at an average rate of HK$30 per square foot, according to the agency. The tenants include co-working operator Spaces, which occupies the top two floors, as well as the roof floor.
The property is attracting considerable interest from several parties, according to market sources.
The building, a two-minute walk from Ngau Tau Kok MTR station, could fetch between HK$7,000 and HK$7,500 per square foot, estimated Vincent Cheung, the managing director of Vincorn.
In January, Hong Kong Baptist Hospital bought a revitalised mixed-use building at 105 Wai Yip Street for HK$137 million, or HK$6,595 per sq ft, but Cheung said 133 Wai Yip has seaviews, a better facade and is conveniently located.
“A higher price than what the other building fetched earlier this year is reasonable,” Cheung said.
In Kwun Tong, considered one of Hong Kong’s top industrial zones, any building charging HK$22 per sq ft as rent can be considered as commanding a premium, given that many properties in the area only charge HK$18 per sq ft or lower, he added.
The building’s ground floor is designated for retail use, while the first and second floors are allocated to food and beverage operators. The third to 12th floors and the rooftop penthouse are meant for office use.
The property will be sold on a “as-is” basis and is subject to existing tenancies and or licences, if any, the agency said. The sale will include fixtures and fittings.
In the first half of the year, more than seven in 10 commercial property deals in the city were distressed assets, an exponential rise from the typical one in 10 transactions in previous years, according to data tracked by anther agnecy.
The trend is likely to persist with about half of commercial property sales tipped to be fire sales, it added.
