The ground-floor shop at Arbuthnot House on Arbuthnot Road, located in the central area of Hong Kong, changed hands late last month for HKD$21.4 million (US$2.73 million), according to local newspaper Sing Tao News.
The premises, spanning 137 square meters, are currently leased to private members’ club Salon No. 10. The seller was Associated Builders Corporation Limited, controlled by family members of the late Henry Fong Yun-wah, chairman of Hong Kong developer Hip Shing Hong.
The company bought the shop in 1971 for about HKD940,000. After holding it for 55 years, it recorded a paper profit of HKD20.46 million, representing an increase of nearly 22-fold.
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Arbuthnot House, Arbuthnot Road, Hong Kong. Photo via Google Maps |
Stanley Poon Chi-ming, managing director of Centaline Commercial, said Hip Shing Hong had owned the property for decades, primarily collecting rental income, and had kept the sale low-profile.
“Hip Shing Hong is a long-established local developer; it has primarily focused on rental income and rarely sells properties,” he told the South China Morning Post.
“However, the company has been restructuring its property portfolio and offloading non-core commercial real estate to reduce its holdings.”
Poon said the developer’s current strategy involves disposing of scattered, non-core properties to raise cash for future land purchases and development.
Land Registry records identify the buyer as Aimba Limited. Its director, Oliver Michael Spiesshofer, is a descendant of Johann Gottfried Spiesshofer, a co-founder of Swiss-headquartered underwear group Triumph International. Oliver Michael Spiesshofer is also the group’s current CEO and managing partner.
Poon called the deal “extremely rare”, saying foreign capital has historically played a limited role in purchases of Hong Kong retail properties, particularly street-level shops.
“The vast majority of local retail properties are purchased by Hong Kong investors and companies, as locals are more familiar with the market,” he said.
“Chinese (investors) have a particular fondness for such properties, adhering to the saying that ‘a single shop can support three generations.’”
Edwin Lee, founder and CEO of Bridgeway Prime Shop Fund Management, called the property an “excellent buy”. He cited its large floor area and location near SoHo and Lan Kwai Fong, in a neighborhood with strong purchasing power for high-end goods and services.
“I believe the transaction price is 20% lower than the market price,” Lee said.