Redevelopment of Commercial Buildings in Changshi Shinsei Hotel Li Zeju’s first large plan after helm
After Li Ka-shing announced his retirement on Friday, he had already deployed a good development direction to pave the way for his eldest son, Li Zeju. The Group’s Hung Hom Hotels Twin Towers and Harbourfront have successively applied to the Buildings Department for redevelopment as a commercial building with a total gross floor area of more than 2.2 million square feet. Industry insiders estimate that the two projects will have a total value of more than 44 billion yuan after redevelopment. This is Li Zeju. He took over as the first large-scale investment reconstruction plan after the president and chairman of the department. Reporter: Ye Hao
Kyung Charm Hoi Tak Estate, Hung Hom Bay, which is owned by No. 12, Hung Hom, was awarded a building plan by the Buildings Department in January this year. It can be reconstructed into two 29-storey commercial buildings on top of a 4-story basement. The floor area is approximately 1.107 million square meters, which is expected to be the largest hotel transfer commercial building project in the market recently. It is reported that the site of the project is a commercial land lease. If it is converted to commercial use, it is not necessary to pay land premium.
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Cheung Kong stated that the adjoining Gap Tower has also applied for redevelopment as a commercial building. According to the Group’s annual report, the GFA has a floor area of approximately 1.07 million square feet and the total gross floor area of the two projects exceeds 2.2 million square feet. The Cheung Group has not yet implemented the plan for redevelopment.
In the recent years, there are also examples of commercial buildings in the area. Referring to the Cheung Po Group, which was previously owned by Shenzhen Fushen Chen Hongtian, in July 2016, it purchased the Hung Hom One HarbourGate East Block at a price of $4.5 billion and the office building has 15 floors. The floor area is approximately 25.4 million square meters, East Tower shop building two floors, floor area of about 26,000 square feet, the total floor area of about 280,000 square feet, with 4.5 billion transaction price, the price of 16,000 yuan. In addition, the West Building and West Commercial Building of the entire building was sold to China Life Insurance (overseas) for 5.85 billion yuan in November 2015. The price was approximately 14,800 yuan, and the property was successfully handed over.
The market expects that the above two projects will enjoy full seascape and railway advantages, and the value will further increase. Lai Fong Senior Director and Valuation and Advisory Department Director Lin Haowen pointed out that the two project heads are expected to perform long-term business development, but it is estimated that the redevelopment plan will not be implemented in a short time, as there are now more than 3,600 hotel rooms for rent in the two hotels. Both the rate and income are good. He believes that if the two major projects are reconstructed as Grade A commercial buildings, it is estimated that after the completion of the project, the price will be about 18,000 to 20,000 yuan, the rent will be 45 to 55 yuan, and the long-term rental rate of return will be about 3-4 percent. He pointed out that this type of Victoria Harbourview commercial building has always been favored by Chinese investors. Apart from long-term lease collection, the project can also be used as a whole building or can be split up for sale. The flexibility is very high.