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Swire Properties sells Cityplaza One office tower for HK$9.85 billion (US$1.27 billion) after its parent posted first interim loss in half a century

Monday, November 9, 2020


(SCMP by Pearl Liu) - Swire Properties, one of Hong Kong’s largest owners of offices and shopping centres, has sold a 21-storey office building to a consortium of investors led by Gaw Capital Partners for HK$9.85 billion (US$1.27 billion), after its parent posted its first interim loss in half a century.

The company, Swire Pacific’s listed property arm, said it had sold Cityplaza One at the Taikoo Shing project on the eastern side of Hong Kong Island for HK$9.85 billion to “realise cash from its investments”, in a filing to Hong Kong stock exchange late on Monday.That translates into a price of HK$15,609 per square foot, which is 18 per cent cheaper than what Swire Properties earned two years ago when it sold the neighbouring Cityplaza Three and Cityplaza Four towers.“[It] is part of our ongoing business strategy – to dispose of certain non-core assets  that will enable us to recycle capital and channel it to new projects in our core markets,” said a spokesperson for Swire Properties in a separate statement.

“We remain committed to Hong Kong and to our long-term investment strategy in our home market. We’re confident in the Hong Kong office market’s long-term outlook.”

Swire Properties’ interim core profit plunged 80 per cent to HK$3.75 billion while its parent group, Swire Pacific, one of Hong Kong’s largest and oldest conglomerates, swung to its first interim loss since 1974 as its Cathay Pacific Airways unit was weighed down by the unprecedented travel slump from the coronavirus pandemic.

Gaw Capital, a Hong Kong-based real estate private equity firm, confirmed it had bought the 23-year-old grade A office tower through a fund under its management, and consortium partners including the 216-year old Schroder Pamfleet, a UK-based multinational asset manager.

 

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