The U.S. government has agreed to sell a compound in a prime Hong Kong neighborhood to local developer Hang Lung Properties for $332 million.
The 26-unit property served as residences for local consulate staff. Hang Lung Properties plans to redevelop it with luxury detached houses, according to the Wall Street Journal.
The complex totals 95,000 square feet and the sale price is considered a major discount for the area. Prices for Hong Kong properties across sectors have been trending downward over the last year as a result of sustained civil unrest in the territory and the coronavirus pandemic.
With the property offering 47,400 square feet of floor area available for redevelopment, the sale price comes out to around $7,000 per square foot. That’s more than a third less than what developer China Resources Land paid per square foot for a comparable, neighboring property in 2018.
News broke in June that the property was on the market. At the time, the U.S. State Department said the sale was part of a wider reinvestment push.
A State Department spokesperson said the sale “will not affect our presence, staffing, or operations in any way,” according to the Journal. Some of the proceeds from the sale will be reinvested into other U.S.-owned properties in Hong Kong.
The U.S. and China have clashed over the latter’s increased political involvement in the historically independent territory.
The sale is expected to close by the end of the year. Hang Lung said that in total the firm would invest about $516 million into the property, including the cost of acquisition. It hopes to complete the redevelopment by 2024. [WSJ] — Dennis Lynch