Chinese developer happy with 66pc jump in paper value of The Center

By Lam Ka-sing / | June 7, 2019 12:04 PM SGT
The chairman of Chinese developer Yuzhou Properties is a contented man.
Lam Lung-on's company, which owns a floor of The Center, Hong Kong's most expensive commercial building, has seen the paper value of the investment grow by 66 per cent in just two years.
The value of the 58th floor of the iconic office building in Central, which was sold to a group of investors for HK$40.2 billion (US$5.12 billion) in May 2017, has appreciated to about HK$50,000 (US$6,381) per square foot from about HK$30,000 two years ago, said Lam, who is also founder of Hong Kong-listed Yuzhou.
"Half [of the 26,356 sq ft floor is for our own use] while the other half is for leasing," said Lam at a media briefing on Monday. "[The value] has appreciated a lot."
Lam, who is also a deputy to the National People's Congress, China's national legislative body, also said that the rent on this floor had risen to more than HK$120 per sq ft, up 30 per cent from 2017.
Sea Basin Investments, a Yuzhou-linked company controlled by Kwok Ying-lan, Lam's wife, was allocated the 58th floor as a shareholder of the CHMT Peaceful Development Asia Property group, led by Hui Wing-mau, Shimao Property Holdings' founder and Pollyanna Chu, listed by Forbes as Hong Kong's wealthiest woman in 2017. CHMT owns a 75 per cent stake in the building.
On April 3 this year, Yuzhou bought the property from Kwok for HK$898.7 million. Kwo is also the vice-chairperson of Yuzhou.
"According to the valuation report prepared by an independent property valuer, the market value of the property as of January 7 , 2019 is approximately HK$1.21 billion," Lam said in a filing to the Hong Kong stock exchange on March 22. "It is the group's strategy to seek investments from time to time so as to broaden the portfolio of the group's properties."