Chinese buyer of record-breaking $5.2bn Hong Kong building will fund 90% through debt

In November, Business Review Asia reported that an office in Hong Kong had sold for $5.2bn in the largest ever recorded transaction for a single office building in the world.

“The Center” is a 73-storey office tower which was owned by Li Ka-Shing, Hong Kong’s richest man and the owner of CK Asset Holdings.

See also:

Business Review Asia – December edition

Noodle giant Nissin issues Hong Kong IPO

Forbes releases China rich list

The Center was sold to a Chinese consortium called CMHT Peaceful Development Asia Property Limited, which was led by China Energy Reserves and Chemical Group. It has now been revealed the group owns 55% of the consortium.

According to Reuters it has now emerged that the consortium plans to borrow as much as 90% of the building’s $5,2bn price tag.

Normally property buyers in Hong Kong will borrow around 40-50% of a deal’s value.

40% is to be raised by a one-year mezzanine loan which will charge 8% interest. The remainder of the money needed, up to 50% of the price, will be raised through a senior loan.

It is thought that the efforts to finance this deal reflect the attraction of Hong Kong office space and the willingness of mainland Chinese companies to pay a huge price for a presence in the city-state’s property market.

Share

Featured Articles

Welcome to the New Age of the CISO

HE Dr Mohamed Al-Kuwaiti, Head of Cyber Security, UAE Government and Dr Aloysius Cheang, Chief Security Officer Huawei UAE, on the new age of the CISO

Making the UAE the world’s strongest digital fortress

His Excellency Dr Mohamed Al-Kuwaiti, Head of Cyber Security, UAE Government, on visionary plans to build the world’s most secure digital society

World Mental Health Day – 10 apps to improve wellbeing

Employers should recognise the growing use of apps to help support mental health – here are 10 to consider on World Mental Health Day

Exec interview: Brook Sims, COO, MAC Diversity Recruiters

Leadership & Strategy

Best new books that will make you a better leader

Leadership & Strategy

5 Mins With: Jeff Li, founder and CEO of Shoplazza

Leadership & Strategy