CK Asset Sells Never-Leased Hong Kong Mall for HK$180 Million

Why Hong Kong developer CK Asset sold a mall at an ‘exceptionally cheap’ price

CK Asset Holdings has sold a vacant Hong Kong shopping mall for HK$179.77 million (US$23 million), in a deal analysts described as “exceptionally cheap”. The sale frees up capital for the developer’s other projects, while the buyer may have to be patient because the mall is expected to struggle to attract tenants in the short term.

A mall that never found tenants

The mall was completed five years ago as part of CK Asset’s residential project Seaside Sonata on Hai Tan Street in Sham Shui Po. It was never leased out, leaving the retail space vacant before the sale.

The property recently changed hands along with a batch of parking spaces, according to Land Registry records. Analysts said the retail portion was sold at HK$2,996 per square foot.

The location is a central part of the buyer’s challenge. Analysts said the mall is off the beaten path and will struggle to attract shops in the short term. That could make filling the space difficult even after the change in ownership.

Why the price matters

The sale comes as commercial and industrial property prices in Hong Kong have declined. Midland Commercial said that decline had created new entry opportunities for investors and end users.

The agency also said the market was giving some owners an opportunity to restructure their property portfolios. For CK Asset, analysts said the transaction releases capital from an asset that had remained vacant. For the buyer, the low price comes with the need to wait for tenants while dealing with the mall’s less accessible location.

Source: South China Morning Post