Tycoon Chen Hongtian finds himself in further financial trouble as agents appointed by creditors announce the tender sale of a HK$7 billion (US$892 million) commercial property in Hong Kong. The property, One HarbourGate East Tower, is part of the three assets that Chen seeks to regain control of. Savills, the sole agent overseeing the sale, has revealed that the tender will be available globally. This development prompts Chen to consider legal action, adding to the ongoing discussions with lenders and the challenges associated with his missed mortgage payments.
Agents appointed by creditors are selling a commercial property in Hong Kong worth HK$7 billion (US$892 million). This property is one of three assets that tycoon Chen Hongtian is currently trying to regain control of. The property, named One HarbourGate East Tower, located in Hung Hom, will be sold through a tender sale by Savills, an international real estate firm appointed as the sole agent. Upon being shown the statement by Savills, Chen, who is the chairman of Cheung Kei Group, told the Post on Sunday that he would ask lawyers to study the matter.
After stating that he had missed mortgage payments due to a “short-term liquidity issue,” Chen informed the Post earlier this month that he was in talks with lenders to regain control of three assets estimated to be worth HK$10 billion (US$1.27 billion). Following this, Savills released a statement last week announcing that agents appointed by creditors were selling one of these assets, a commercial property in Hong Kong, through a tender sale.
Earlier this month, Chen announced that he intends to inject new funds to address the “mild default” problem associated with three properties, which includes One HarbourGate tower and a house valued at HK$2.1 billion on The Peak.
One HarbourGate East Tower, which consists of an office tower and a two-story retail space along the waterfront, spans approximately 279,000 square feet of commercial space. Wheelock Properties completed the tower in 2016, and it includes 155 car parking spaces. According to the Savills statement, the property’s market value was estimated to be around HK$7 billion last year based on the original owner’s provision. The statement also mentioned that the tender will be available globally and is set to close on August 28..
Christopher So Man-chun and Victor Jong Yat-kit from PwC Hong Kong took over the ownership of the One HarbourGate building, which was purchased for HK$4.5 billion in 2016. They did so on behalf of Hang Seng Bank.
According to Raymond Wan, the Chief Senior Director of Investment at Savills, the One HarbourGate building serves as the headquarters for Sun Life Insurance, while the adjacent West Tower is the headquarters for China Life. Additionally, the occupancy rate of the property is 84%, as stated by Godfrey Cheng, the Deputy Senior Director of the Investment CEO Office at Savills.
Chen stated that the three properties – a house spanning 9,212 square feet at 15 Gough Hill Road on The Peak, a flat in Opus Hong Kong in eastern Mid-Levels, and One HarbourGate East Tower – were mortgaged with banks for around HK$6 billion. However, Chen claimed that their actual value was around HK$10 billion.
In March, the Bank of East Asia appointed Deloitte China partners Derek Lai Kar-yan and Ivan Chan Man-hoi as receivers and managers for the Gough Hill Road property, which had been seized by them.
Bank of Communications, which had granted a mortgage in August 2019, seized the Opus Hong Kong flat in the previous month. Rosanna Tang, the Executive Director and Head of Research at Cushman & Wakefield, stated that investors are currently seeking opportunities to purchase undervalued assets in various real estate sectors, including large-sized receivership deals.
Rosanna Tang stated that in the past few months, the real estate market has observed several receivership deals, and property owners are now more open to selling their non-core assets. She believes that more such significant transactions will take place later in the year.
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