'King of Cassettes' David Chan Ping-chi to sell subdivided office units at The Center for up to 47 per cent profit

Cassette tape and CD magnate David Chan Ping-chi, one of 10 ultra wealthy investors who paid a world record US$5.15 billion for The Center in late 2017, is offering subdivided office units in the landmark skyscraper for up to 47 per cent more than what he spent.

Chan could pull in sales revenue of HK$1.3 billion (US$170 million) if all 12 units on the 39th floor are sold. Each floor of the 73-storey The Center covers an area of 26,000 square feet.

"Five units have been reserved. Details of the terms are being discussed with the potential buyers," said Lam Chi-fung, who is acting on behalf of Chan, the chairman of ACME Group, on the deal.

The 12 units, whose sizes range from 1,841 to 3,140 square feet, are on sale for between HK$76.63 million and HK$150.5 million or HK$40,882 to HK$48,435 per square foot, according to a price list circulated among agents on Monday.

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Chan, dubbed the King of Cassettes, and the other investors paid HK$33,000 per square foot when they bought 48 floors of The Center for a record-breaking HK$40.2 billion. Storeys 49 and 50 sold for as much as HK$55,000 per square foot in October last year, five months after the completion of the deal.

Last month another owner, Raymond Tsoi Chi-chung, sold the last subdivided unit on the 22nd floor for HK$35,000 per square foot. Tsoi, who divided the whole floor into 12 units, has raised HK$1.1 billion by selling them all to different individual buyers.

Property consultants expect strong interest from end-users who would prefer to own their office in Central rather than pay the lofty rents.

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Central was ranked the world's most expensive office location for a third year by global commercial real estate firm CBRE, with space costing US$306 per square foot, 30 per cent higher than the second highest area, London's West End at US$235 per square foot.

"Buying demand for office units of 2,000 to 3,000 square feet in Central is still strong. We have clients from Hong Kong, mainland finance firms and international property investment companies expressing an interest in the spaces," said Eric Ong, chief operating officer of Midland IC&I, a real estate agency. "Asking price for the latest batch of units are market price."

Space at The Center has recently changed hands for between HK$38,000 per square foot on the 21st floor to HK$55,000 per square foot on the 50th floor, according to agents.

"Central's Grade A offices are always in demand from local investors who hold a medium to long term view, plus there is strong support from end users like local listed companies and Chinese corporates," said Antonio Wu, deputy managing director of capital markets and investment services at Colliers International.

About five of the 48 floors bought by the 10 investors appear to have been resold. Although some of those fetched prices below expectations, the owners still made a profit.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.